Ozmyn has developed a prototype of a bullet- proof jacket. A supplier is considering the technology and has offered to pay Ozmyn RM30,000 in years 1,2 and 3; and RM40,000 in year 4 to 6. All payments...

Ozmyn has developed a prototype of a bullet- proof jacket. A supplier is considering the technology and has offered to pay Ozmyn RM30,000 in years 1,2 and 3; and RM40,000 in year 4 to 6. All payments will be made at the end of each year. i) If Ozmyn applies a required rate of return of 10% to them, calculate the present value of this series of payments. ii) Another company has made an offer of a one- time payment of RM275,000 for the fabric. Explain which offer should Ozmyn accept.

Jun 06, 2022
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