Answer:
The company could pay up to 866,965.89 dollars today to solve the current heat exchanger situation
Explanation:
We have to determinate the present value of 7 year annuity which increase at a rate of 7% when the cost of capital is 15% being the first quota 175,000 dollars
[tex]\frac{1-(1+g)^{n}\times (1+r)^{-n} }{r - g}[/tex]
grow rate 0.07
required return 0.15
Cuota 175,000
n 7
PV = 866,965.89