FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Related questions
Question
Assume that a company is considering buying a new piece of equipment for $240,000 that would have a useful life of five years and no salvage value. The equipment would generate the following estimated annual revenues and expenses:
| Revenues | $ 105,500 | |
|---|---|---|
| Less operating expenses: | ||
| Commissions | $ 15,000 | |
| Insurance | 5,000 | |
| 48,000 | ||
| Maintenance | 30,000 | 98,000 |
| Net operating income | $ 7,500 |
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.
The
Transcribed Image Text:EXHIBIT 14B-1
Present Value of $1; 1 ( 1 + r ) n
Periods
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
1
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.901
0.893
0.885
0.877
0.870
0.862
0.855
0.847
0.840
0.833
0.826
0.820
0.813
0.806
0.800
2
0.925
0.907
0.890
0.873
0.857
0.842
0.826
0.812
0.797
0.783
0.769
0.756 | 0.743
0.731
0.718
0.706
0.694
0.683
0.672
0.661
0.650
0.640
3
0.889
0.864
0.840
0.816
0.794
0.772
0.751
0.731
0.712
0.693
0.675
0.658
0.641
0.624
0.609
0.593
0.579
0.564
0.551
0.537
0.524
0.512
4
0.855
0.823
0.792
0.763
0.735
0.708
0.683
0.659
0.636
0.613
0.592
0.572 | 0.552
0.534
0.516
0.499
0.482
0.467
0.451
0.437
0.423
0.410
5
0.822
0.784
0.747
0.713
0.681
0.650
0.621
0.593
0.567
0.543
0.519
0.497
0.476
0.456
0.437
0.419
0.402
0.386
0.370
0.355
0.341
0.328
0.790
0.746
0.705
0.666
0.630
0.596
0.564
0.535
0.507
0.480
0.456
0.432 | 0.410
0.390
0.370
0.352
0.335
0.319
0.303
0.289
0.275
0.262
7
0.760
0.711
0.665
0.623
0.583
0.547
0.513
0.482
0.452
0.425
0.400
0.376
0.354 0.333
0.314 | 0.296
0.279
0.263
0.249
0.235
0.222
0.210
8
0.731
0.677
0.627
0.582
0.540
0.502
0.467
0.434
0.404
0.376
0.351
0.327 | 0.305
0.285
0.266
0.249
0.233
0.218
0.204
0.191
0.179
0.168
9.
0.703
0.645
0.592
0.544
0.500
0.460
0.424
0.391
0.361
0.333
0.308
0.284
0.263
0.243
0.225
0.209
0.194
0.180
0.167
0.155
0.144
0.134
10
0.676
0.614
0.558
0.508
0.463
0.422
0.386
0.352
0.322
0.295
0.270
0.247
0.227
0.208
0.191
0.176
0.162
0.149
0.137
0.126
0.116
0.107
11
0.650
0.585
0.527
0.475
0.429
0.388
0.350
0.317
0.287
0.261
0.237
0.215
0.195
0.178
0.162 | 0.148
0.135
0.123
0.112
0.103
0.094
0.086
12
0.625
0.557
0.497
0.444
0.397
0.356
0.319
0.286
0.257
0.231
0.208
0.187 | 0.168
0.152
0.137
0.124
0.112
0.102
0.092
0.083
0.076
0.069
13
0.601
0.530
0.469
0.415
0.368
0.326
0.290
0.258
0.229
0.204
0.182
0.163
0.145
0.130
0.116
0.104
0.093
0.084
0.075
0.068
0.061
0.055
14
0.577
0.505
0.442
0.388
0.340
0.299
0.263
0.232
0.205
0.181
0.160
0.141
0.125
0.111
0.099 0.088
0.078
0.069
0.062
0.055
0.049
0.044
15
0.555
0.481
0.417
0.362
0.315
0.275
0.239
0.209
0.183
0.160
0.140
0.123
0.108
0.095
0.084
0.074
0.065
0.057
0.051
0.045
0.040
0.035
16
0.534
0.458
0.394
0.339
0.292
0.252
0.218
0.188
0.163
0.141
0.123
0.107
0.093
0.081
0.071
0.062
0.054
0.047
0.042
0.036
0.032
0.028
17
0.513
0.436
0.371
0.317
0.270
0.231
0.198
0.170
0.146
0.125
0.108
0.093
0.080
0.069
0.060 | 0.052
0.045
0.039
0.034
0.030
0.026
0.023
18
0.494
0.416
0.350
0.296
0.250
0.212
0.180
0.153
0.130
0.111
0.095
0.081
0.069
0.059
0.051
0.044
0.038
0.032
0.028
0.024
0.021
0.018
19
0.475
0.396
0.331
0.277
0.232
0.194
0.164
0.138
0.116
0.098
0.083
0.070
0.060
0.051
0.043
0.037
0.031
0.027
0.023 | 0.020
0.017
0.014
20
0.456
0.377
0.312
0.258
0.215
0.178
0.149
0.124
0.104
0.087
0.073
0.061
0.051
0.043
0.037
0.031
0.026
0.022
0.019
0.016
0.014
0.012
21
0.439
0.359
0.294
0.242
0.199
0.164
0.135
0.112
0.093
0.077
0.064
0.053
0.044 | 0.037
0.031
0.026
0.022
0.018
0.015 | 0.013
0.011
0.009
22
0.422
0.342
0.278
0.226
0.184
0.150
0.123
0.101
0.083
0.068
0.056
0.046
0.038
0.032
0.026
0.022
0.018
0.015
0.013
0.011
0.009
0.007
23
0.406
0.326
0.262
0.211
0.170
0.138
0.112
0.091
0.074
0.060
0.049
0.040
0.033
0.027
0.022 | 0.018
0.015
0.012
0.010 | 0.009
0.007
0.006
24
0.390
0.310
0.247
0.197
0.158
0.126
0.102
0.082
0.066
0.053
0.043
0.035
0.028
0.023
0.019
0.015
0.013
0.010
0.008
0.007
0.006
0.005
25
0.375
0.295
0.233
0.184
0.146
0.116
0.092
0.074
0.059
0.047
0.038
0.030 | 0.024 | 0.020
0.016
0.013
0.010
0.009
0.007 | 0.006
0.005
0.004
26
0.361
0.281
0.220
0.172
0.135
0.106
0.084
0.066
0.053
0.042
0.033
0.026
0.021
0.017
0.014
0.011
0.009
0.007
0.006
0.005
0.004
0.003
27
0.347
0.268
0.207
0.161
0.125
0.098
0.076
0.060
0.047
0.037
0.029
0.023
0.018
0.014
0.011
0.009
0.007
0.006
0.005
0.004
0.003
0.002
28
0.333
0.255
0.196
0.150
0.116 | 0.090
0.069
0.054
0.042
0.033
0.026
0.020
0.016
0.012
0.010
0.008
0.006
0.005
0.004
0.003
0.002
0.002
0.029 | 0.022
0.026 | 0.020
29
0.321
0.243
0.185
0.141
0.107
0.082
0.063
0.048
0.037
0.017 | 0.014
0.011
0.008
0.006
0.005
0.004
0.003
0.002
0.002
0.002
30
0.308
0.231
0.174
0.131
0.099
0.075
0.057
0.044
0.033
0.015
0.012
0.009
0.007
0.005
0.004
0.003
0.003
0.002
0.002
0.001
40
0.208
0.142
0.097
0.067
0.046
0.032
0.022
0.015
0.011
0.008
0.005
0.004 | 0.003
0.002
0.001
0.001
0.001
0.000
0.000
0.000
0.000
0.000
![EXHIBIT 14B-2
Present Value of an Annuity of $1 in Arrears; 1 r[1-1 (1 +r) n ]
Periods
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
1
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.901
0.893
0.885
0.877
0.870
0.862
0.855
0.847
0.840
0.833
0.826
0.820
0.813
0.806
0.800
2
1.886
1.859
1.833
1.808
1.783
1.759
1.736
1.713
1.690
1.668
1.647
1.626
1.605
1.585
1.566
1.547
1.528
1.509
1.492
1.474
1.457
1.440
3
2.775
2.723
2.673
2.624
2.577
2.531
2.487
2.444
2.402
2.361
2.322
2.283
2.246
2.210
2.174
2.140
2.106
2.074
2.042
2.011
1.981
1.952
4
3.630
3.546
3.465
3.387
3.312
3.240
3.170
3.102
3.037
2.974
2.914
2.855
2.798
2.743
2.690| 2.639
2.589 | 2.540
2.494
2.448
2.404
2.362
5
4.452
4.329
4.212
4.100
3.993
3.890
3.791
3.696
3.605
3.517
3.433
3.352
3.274
3.199
3.127
3.058
2.991
2.926
2.864
2.803
2.745
2.689
6.
5.242
5.076
4.917
4.767
4.623
4.486
4.355
4.231
4.111
3.998
3.889
3.784
3.685
3.589
3.498
3.410
3.326
3.245
3.167
3.092
3.020
2.951
7
6.002
5.786
5.582
5.389
5.206
5.033
4.868
4.712
4.564 | 4.423
4.288
4.160
4.039
3.922
3.812
3.706
3.605
3.508
3.416
3.327
3.242
3.161
8
6.733
6.463
6.210
5.971
5.747
5.535
5.335
5.146
4.968
4.799
4.639
4.487
4.344
4.207
4.078
3.954
3.837
3.726
3.619
3.518 | 3.421
3.329
9.
7.435
7.108
6.802
6.515
6.247
5.995
5.759
5.537
5.328
5.132
4.946
4.772 | 4.607
4.451
4.303
4.163
4.031
3.905
3.786| 3.673
3.566
3.463
10
8.111
7.722
7.360
7.024
6.710
6.418
6.145
5.889
5.650
5.426
5.216
5.019
4.833
4.659
4.494| 4.339
4.192
4.054
3.923
3.799
3.682
3.571
11
8.760
8.306
7.887
7.499
7.139
6.805
6.495
6.207
5.938
5.687
5.453
5.234
5.029
4.836
4.656
4.486
4.327
4.177
4.035
3.902
3.776
3.656
12
9.385
8.863
8.384
7.943
7.536
7.161
6.814
6.492
6.194
5.918
5.660
5.421
5.197
4.988
4.793
4.611
4.439
4.278
4.127 | 3.985
3.851
3.725
13
9.986
9.394
8.853
8.358
7.904
7.487
7.103
6.750
6.424
6.122
5.842 | 5.583
5.342
5.118
4.910
4.715
4.533
4.362
4.203
4.053
3.912
3.780
10.563 9.899
11.118 10.380 | 9.712
11.652 10.838 10.106 9.447
12.166 | 11.274 | 10.477 9.763
12.659 11.690 | 10.828 | 10.059 9.372
13.134 12.085 | 11.158 | 10.336| 9.604
13.590 12.462 | 11.470 | 10.594| 9.818
14.029 12.821 | 11.764 | 10.836 | 10.017 9.292
14.451 13.163 | 12.042 11.061 | 10.201 | 9.442
14.857 13.489 | 12.303 11.272 | 10.371| 9.580
15.247 13.799 | 12.550 | 11.469 | 10.529| 9.707
15.622 14.094 | 12.783 | 11.654 | 10.675| 9.823
15.983 14.375 | 13.003 | 11.826 | 10.810| 9.929
16.330 14.643 | 13.211 | 11.987 | 10.935 | 10.027 9.237
16.663 14.898 | 13.406 | 12.137 | 11.051 | 10.116 | 9.307
16.984 | 15.141 | 13.591 | 12.278 | 11.158 | 10.198| 9.370 | 8.650
17.292 15.372 | 13.765 | 12.409 | 11.258 | 10.274 9.427
19.793 | 17.159 | 15.046 13.332 11.925 10.757 9.779
14
9.295
8.745
8.244
7.786
7.367
6.982
6.628
6.302
6.002
5.724
5.468
5.229
5.008
4.802
4.611
4.432
4.265
4.108
3.962
3.824
15
9.108
8.559
8.061
7.606
7.191
6.811
6.462
6.142
5.847
5.575
5.324
5.092
4.876
4.675
4.489
4.315 | 4.153
4.001
3.859
16
8.851
8.313
7.824
7.379
6.974
6.604
6.265
5.954
5.668
5.405
5.162 | 4.938
4.730
4.536
4.357
4.189
4.033
3.887
17
9.122
8.544
8.022
7.549
7.120
6.729
6.373
6.047
5.749 | 5.475
5.222
4.990
4.775
4.576 | 4.391
4.219
4.059
3.910
18
8.756
8.201
7.702
7.250
6.840
6.467
6.128
5.818
5.534
5.273
5.033
4.812
4.608
4.419
4.243
4.080
3.928
19
8.950
8.365
7.839
7.366
6.938
6.550
6.198
5.877
5.584
5.316
5.070
4.843
4.635
4.442 4.263
4.097
3.942
20
9.129
8.514
7.963
7.469
7.025
6.623
6.259
5.929
5.628
5.353
5.101
4.870
4.657
4.460
4.279
4.110
3.954
21
8.649
8.075
7.562
7.102
6.687
6.312
5.973
5.665
5.384
5.127
4.891
4.675
4.476 | 4.292 | 4.121
3.963
22
8.772
8.176
7.645
7.170
6.743
6.359
6.011
5.696
5.410
5.149
4.909
4.690
4.488
4.302
4.130
3.970
23
8.883
8.266
7.718
7.230
6.792
6.399
6.044
5.723
5.432
5.167
4.925
4.703
4.499
4.311
4.137
3.976
24
8.985
8.348
7.784
7.283
6.835
6.434
6.073
5.746
5.451
5.182
4.937
4.713
4.507
4.318
4.143
3.981
25
9.077
8.422
7.843
7.330
6.873
6.464
6.097
5.766
5.467
5.195 | 4.948 | 4.721
4.514 | 4.323
4.147
3.985
26
9.161
8.488
7.896
7.372
6.906
6.491
6.118
5.783
5.480
5.206
4.956
4.728
4.520
4.328
4.151
3.988
6.514| 6.136 | 5.798
6.152 | 5.810
6.166 | 5.820
27
8.548
7.943 | 7.409
6.935
5.492
5.215
4.964
4.734
4.524 4.332 | 4.154
3.990
28
8.602 | 7.984
7.441
6.961
6.534
5.502
5.223
4.970
4.739
4.528
4.335
4.157
3.992
29
8.022
7.470
6.983
6.551
5.510
5.229
4.975
4.743
4.531
4.337
4.159
3.994
30
8.694
8.055
7.496
7.003
6.566
6.177
5.829
5.517
5.235
4.979
4.746
4.534
4.339
4.160
3.995
40
8.951
8.244| 7.634
7.105
6.642
6.233
5.871
5.548
5.258
4.997
4.760
4.544 | 4.347
4.166
3.999](https://content.bartleby.com/qna-images/question/16afad9b-824d-42b7-9e40-175f68ea31da/3ef42b35-de94-4bdd-848c-40b15d40be0e/s227l1v_processed.png)
Transcribed Image Text:EXHIBIT 14B-2
Present Value of an Annuity of $1 in Arrears; 1 r[1-1 (1 +r) n ]
Periods
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
1
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.901
0.893
0.885
0.877
0.870
0.862
0.855
0.847
0.840
0.833
0.826
0.820
0.813
0.806
0.800
2
1.886
1.859
1.833
1.808
1.783
1.759
1.736
1.713
1.690
1.668
1.647
1.626
1.605
1.585
1.566
1.547
1.528
1.509
1.492
1.474
1.457
1.440
3
2.775
2.723
2.673
2.624
2.577
2.531
2.487
2.444
2.402
2.361
2.322
2.283
2.246
2.210
2.174
2.140
2.106
2.074
2.042
2.011
1.981
1.952
4
3.630
3.546
3.465
3.387
3.312
3.240
3.170
3.102
3.037
2.974
2.914
2.855
2.798
2.743
2.690| 2.639
2.589 | 2.540
2.494
2.448
2.404
2.362
5
4.452
4.329
4.212
4.100
3.993
3.890
3.791
3.696
3.605
3.517
3.433
3.352
3.274
3.199
3.127
3.058
2.991
2.926
2.864
2.803
2.745
2.689
6.
5.242
5.076
4.917
4.767
4.623
4.486
4.355
4.231
4.111
3.998
3.889
3.784
3.685
3.589
3.498
3.410
3.326
3.245
3.167
3.092
3.020
2.951
7
6.002
5.786
5.582
5.389
5.206
5.033
4.868
4.712
4.564 | 4.423
4.288
4.160
4.039
3.922
3.812
3.706
3.605
3.508
3.416
3.327
3.242
3.161
8
6.733
6.463
6.210
5.971
5.747
5.535
5.335
5.146
4.968
4.799
4.639
4.487
4.344
4.207
4.078
3.954
3.837
3.726
3.619
3.518 | 3.421
3.329
9.
7.435
7.108
6.802
6.515
6.247
5.995
5.759
5.537
5.328
5.132
4.946
4.772 | 4.607
4.451
4.303
4.163
4.031
3.905
3.786| 3.673
3.566
3.463
10
8.111
7.722
7.360
7.024
6.710
6.418
6.145
5.889
5.650
5.426
5.216
5.019
4.833
4.659
4.494| 4.339
4.192
4.054
3.923
3.799
3.682
3.571
11
8.760
8.306
7.887
7.499
7.139
6.805
6.495
6.207
5.938
5.687
5.453
5.234
5.029
4.836
4.656
4.486
4.327
4.177
4.035
3.902
3.776
3.656
12
9.385
8.863
8.384
7.943
7.536
7.161
6.814
6.492
6.194
5.918
5.660
5.421
5.197
4.988
4.793
4.611
4.439
4.278
4.127 | 3.985
3.851
3.725
13
9.986
9.394
8.853
8.358
7.904
7.487
7.103
6.750
6.424
6.122
5.842 | 5.583
5.342
5.118
4.910
4.715
4.533
4.362
4.203
4.053
3.912
3.780
10.563 9.899
11.118 10.380 | 9.712
11.652 10.838 10.106 9.447
12.166 | 11.274 | 10.477 9.763
12.659 11.690 | 10.828 | 10.059 9.372
13.134 12.085 | 11.158 | 10.336| 9.604
13.590 12.462 | 11.470 | 10.594| 9.818
14.029 12.821 | 11.764 | 10.836 | 10.017 9.292
14.451 13.163 | 12.042 11.061 | 10.201 | 9.442
14.857 13.489 | 12.303 11.272 | 10.371| 9.580
15.247 13.799 | 12.550 | 11.469 | 10.529| 9.707
15.622 14.094 | 12.783 | 11.654 | 10.675| 9.823
15.983 14.375 | 13.003 | 11.826 | 10.810| 9.929
16.330 14.643 | 13.211 | 11.987 | 10.935 | 10.027 9.237
16.663 14.898 | 13.406 | 12.137 | 11.051 | 10.116 | 9.307
16.984 | 15.141 | 13.591 | 12.278 | 11.158 | 10.198| 9.370 | 8.650
17.292 15.372 | 13.765 | 12.409 | 11.258 | 10.274 9.427
19.793 | 17.159 | 15.046 13.332 11.925 10.757 9.779
14
9.295
8.745
8.244
7.786
7.367
6.982
6.628
6.302
6.002
5.724
5.468
5.229
5.008
4.802
4.611
4.432
4.265
4.108
3.962
3.824
15
9.108
8.559
8.061
7.606
7.191
6.811
6.462
6.142
5.847
5.575
5.324
5.092
4.876
4.675
4.489
4.315 | 4.153
4.001
3.859
16
8.851
8.313
7.824
7.379
6.974
6.604
6.265
5.954
5.668
5.405
5.162 | 4.938
4.730
4.536
4.357
4.189
4.033
3.887
17
9.122
8.544
8.022
7.549
7.120
6.729
6.373
6.047
5.749 | 5.475
5.222
4.990
4.775
4.576 | 4.391
4.219
4.059
3.910
18
8.756
8.201
7.702
7.250
6.840
6.467
6.128
5.818
5.534
5.273
5.033
4.812
4.608
4.419
4.243
4.080
3.928
19
8.950
8.365
7.839
7.366
6.938
6.550
6.198
5.877
5.584
5.316
5.070
4.843
4.635
4.442 4.263
4.097
3.942
20
9.129
8.514
7.963
7.469
7.025
6.623
6.259
5.929
5.628
5.353
5.101
4.870
4.657
4.460
4.279
4.110
3.954
21
8.649
8.075
7.562
7.102
6.687
6.312
5.973
5.665
5.384
5.127
4.891
4.675
4.476 | 4.292 | 4.121
3.963
22
8.772
8.176
7.645
7.170
6.743
6.359
6.011
5.696
5.410
5.149
4.909
4.690
4.488
4.302
4.130
3.970
23
8.883
8.266
7.718
7.230
6.792
6.399
6.044
5.723
5.432
5.167
4.925
4.703
4.499
4.311
4.137
3.976
24
8.985
8.348
7.784
7.283
6.835
6.434
6.073
5.746
5.451
5.182
4.937
4.713
4.507
4.318
4.143
3.981
25
9.077
8.422
7.843
7.330
6.873
6.464
6.097
5.766
5.467
5.195 | 4.948 | 4.721
4.514 | 4.323
4.147
3.985
26
9.161
8.488
7.896
7.372
6.906
6.491
6.118
5.783
5.480
5.206
4.956
4.728
4.520
4.328
4.151
3.988
6.514| 6.136 | 5.798
6.152 | 5.810
6.166 | 5.820
27
8.548
7.943 | 7.409
6.935
5.492
5.215
4.964
4.734
4.524 4.332 | 4.154
3.990
28
8.602 | 7.984
7.441
6.961
6.534
5.502
5.223
4.970
4.739
4.528
4.335
4.157
3.992
29
8.022
7.470
6.983
6.551
5.510
5.229
4.975
4.743
4.531
4.337
4.159
3.994
30
8.694
8.055
7.496
7.003
6.566
6.177
5.829
5.517
5.235
4.979
4.746
4.534
4.339
4.160
3.995
40
8.951
8.244| 7.634
7.105
6.642
6.233
5.871
5.548
5.258
4.997
4.760
4.544 | 4.347
4.166
3.999
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