Question: Easy Composting signs a contract purchasing the right to use, manufacture, and sell a proprietary home use composting process developed by EverGreen Industries. Easy Composting

Easy Composting signs a contract purchasing the right to use, manufacture, and sell a proprietary home use composting process developed by EverGreen Industries. Easy Composting estimates that it will earn $120,000 annually (at the end of each year) for the next 7 years. The current market interest rate is 5% for this type of contractual agreement, however, adjustments for uncertainties related to this specific process are estimated at 3%. What is the value in use of this contract to Easy Composting?

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