## Question

###### ARROW BACK Questions Cullumber Company signs a contract to sell the use of its patented manufacturing...

ARROW BACK Questions Cullumber Company signs a contract to sell the use of its patented manufacturing technology to Bramble Corp. for 14 years. The contract for this transaction stipulates that Bramble Corp. pays Cullumber $17,500 at the end of each year for the use of this technology. Using a discount rate of 8%, what is the value in use of the patented manufacturing technology? (For calculation purposes, use s decimal places as displayed in the factor table provided. Round final answer to 2 decimal places, ag. 5,275.25.) Check here to view the factor table PRESENT VALUE OF Click here to view the factor table PRESENT VALUE OF AN ANNUITY OEL Value in use

## Answers

Solution:

Value of patent = Present value of all cash flows

= Cumulative present value factor (8%, 14 years) * $17,500

= 8.24424 * $17,500

Value of patent = $144,274.20

_{Please rate positive and comment in case of any doubt. I would be happy to help you further.}

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