On January 1, 2012, Enrich Company purchased a machine under the following terms: a. 100,000 downpayment b. four annual payments of P200, 000, the first installment to be paid on December 31, 2012 The fair value of the machine is not clearly determinable on the date of acquisition. The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10% for four periods are: Present value of 1 .683 Present value of ordinary annuity of 1 3.170 Required: How much is the cost of the machine_____
On January 1, 2012, Enrich Company purchased a machine under the following terms: a. 100,000 downpayment b. four annual payments of P200, 000, the first installment to be paid on December 31, 2012 The fair value of the machine is not clearly determinable on the date of acquisition. The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10% for four periods are: Present value of 1 .683 Present value of ordinary annuity of 1 3.170 Required: How much is the cost of the machine_____
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2012, Enrich Company purchased a machine under the following terms:
a. 100,000 downpayment
b. four annual payments of P200, 000, the first installment to be paid on December 31,
2012
The fair value of the machine is not clearly determinable on the date of acquisition.
The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10%
for four periods are:
Present value of 1 .683
Present value of ordinary annuity of 1 3.170
Required: How much is the cost of the machine_________________
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