E9-13 (Algo) Computing Four Present Value Problems LO 9-7 On January 1 of this year, Shannon Company completed the following transactions (assume a 10% annual interest rate): (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Bought a delivery truck and agreed to pay $61,500 at the end of three years. b. Rented an office building and was given the option of paying $11,500 at the end of each of the next three years or paying $29,500 immediately. c. Established a savings account by depositing a single amount that will increase to $93,000 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 10 equal annual year-end payments of $41,500 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? (Round your answer to nearest whole dollar.) Cost of the truck b. Which option for the office building results in the lowest present value? O Pay in single installment Pay in three installments c. What single amount must be deposited in this account on January 1 of this year? (Round your answer to nearest whole dollar.) Amount to deposit

E9-13 (Algo) Computing Four Present Value Problems LO 9-7 On January 1 of this year, Shannon Company completed the following transactions (assume a 10% annual interest rate): (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Bought a delivery truck and agreed to pay $61,500 at the end of three years. b. Rented an office building and was given the option of paying $11,500 at the end of each of the next three years or paying $29,500 immediately. c. Established a savings account by depositing a single amount that will increase to $93,000 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 10 equal annual year-end payments of $41,500 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? (Round your answer to nearest whole dollar.) Cost of the truck b. Which option for the office building results in the lowest present value? O Pay in single installment Pay in three installments c. What single amount must be deposited in this account on January 1 of this year? (Round your answer to nearest whole dollar.) Amount to deposit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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E9-13 (Algo) Computing Four Present Value Problems LO 9-7 On January 1 of this year, Skamania Company completed the following transactions (assume a 8% annual interest rate): (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. a. Bought a delivery truck and agreed to pay $60,800 at the end of three years. b. Rented an office building and was given the option of paying $10,800 at the end of each of the next three years or paying $28,800 immediately. c. Established a savings account by depositing a single amount that will increase to $91,600 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 8 equal annual year-end payments of $40,800 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? b. Which option for the office building results in the lowest present value? c. What single amount…
ging interest at j12-6% with monthly payments of $321.50 Calculate the missing amounts in the amortization table. Place the value for A in the first answer box, B in the second and C in the third. %23 PMT Interest Principal Balance 8,000.00 1 321.50 40.00 281.50 7,718.50 2 321.50
Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a: Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200 at the end of the 6th year. b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to $490,900 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first year, $113,100 at the end of the second year, and $150,600 at the end of the third year d. Purchased a $173,000 machine on January 1 of this year for $34,600 cash A five-year note is signed for the balance. The note will be paid in five equal…
Required information [The following information applies to the questions displayed below] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of $115,000 at the end of the 7th year. b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to $490,000 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112.500 at the end of the second year, and $150,000 at the end of the third year d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance. The note will be paid in five equal…
Give typing answer with explanation and conclusion YG Corporation recently issued 270-day commercial paper with a face value of $2,000,000 and a simple interest rate of 11 percent. The company paid a transaction fee equal to 0.4 percent of the issue, which was taken out of the issue amount before the company received any funds. Assuming there are 360 days in a year, what is the commercial paper's effective annual rate (rEAR)? a. 17.51% b. 11.99% c. 12.56% d. 12.63% e. 12.82%
On January 1, a company agrees to pay $13,000 in six years. If the annual interest rate is 2%, determine how much cash the company. can borrow with this agreement. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Future Value Table Factor Amount Borrowed
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! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
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On January 1, a company agrees to pay $14,000 in three years. If the annual interest rate is 9%, determine how much cash the company can borrow with this agreement. (PV of $1. EV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value Table Factor Amount Borrowed