Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George isconsidering buying equipment from Lights, Camera, and More for $130,000 and therefore has the following payment options:Payment Payment in OneOption 1Option 2Option 3Required:Today$130,000Year$ 0Total Payment$130,00065,000071,500149,500136,500149,5001-a. Assuming an annual discount rate of 12%, calculate the present value and the total cost.1-b. Which option's cost has the lowest present value?Complete this question by entering your answers in the tabs below.Req 1AReq 1BAssuming an annual discount rate of 12%, calculate the present value and the total cost. (FV of $1, PV of $1, FVA of $1,and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.)PaymentTodayPresent Value ofPayment in One YearTotal Present Value(or Total Cost)Option 1Option 2Option 3< Req 1AReq 1B >

Payment todayPayment in one yearTotal paymentsOption 1$130,000.00$130,000.00Option…

Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $130,000 and therefore has the following payment options: Payment Payment in One Option 1 Option 2 Option 3 Required: Today $130,000 65,000 Year Total Payment $ 0 $130,000 71,500 136,500 149,500 149,500 I-a. Assuming an annual discount rate of 12%, calculate the present value and the total cost. I-b. Which option's cost has the lowest present value?

Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $130,000 and therefore has the following payment options: Payment Payment in One Option 1 Option 2 Option 3 Required: Today $130,000 65,000 Year Total Payment $ 0 $130,000 71,500 136,500 149,500 149,500 I-a. Assuming an annual discount rate of 12%, calculate the present value and the total cost. I-b. Which option's cost has the lowest present value?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...

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Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $145,000 and therefore has the following payment options: Рaуment Today $145,000 Payment in One Year Total Option 1 Option 2 Option 3 Рауment $ 145,000 152,250 166,750 72,500 79,750 166,750 Required: 1-a. Assuming an annual discount rate of 12%, calculate the present value and the total cost. (FV of $1, PV of $1. EVA of $1., and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Payment Today Present Value of Total Present Value Payment in One Year (or Total Cost) Option 1 Option 2 Option 3 1-b. Which option's cost has the lowest present value? Option 1 O Option 2 O Option 3
Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining one-half plus10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $150,000 and therefore has the following payment options: Payment Today Payment in One Year Total Payment Option 1 $150,000 $ 0 $150,000 Option 2 75,000 82,500 157,500 Option 3 0 172,500 172,500 Required:Assuming an annual discount rate of 11%, calculate which option’s cost has the lowest present value.
Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today. (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $70,000 and therefore has the following payment options: Раyment Today $70,000 Payment in Total One Year Option 1 Option 2 Option 3 Payment $ 70,000 73,500 80,500 35,000 38,500 80,500 Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) (Hint: For each option, enter any amounts paid today in the column labeled "Payment Today:" enter the present value of any amounts paid in 1 year in the column labeled "Payment in One Year;" enter the total of the amounts in the first 2…
int Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $150,000 and therefore has the following payment options: Option 1 Option 2 Option 3 Payment Today $ 150,000 75,000 0 Payment in. One Year $0 92.500 172,500 Total Payment $ 150,000 157,500 172.500 Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost 1-b. Which option's cost has the lowest present value?
ces Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one- half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $120,000 and therefore has the following payment options: Option 1 Option 2 Option 3 Payment Payment in One Today Year Req 1A $ 120,000 60,000 0 Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost. 1-b. Which option's cost has the lowest present value? Option 1 Option 2 Option 3 Complete this question by entering your answers in the tabs below. $0 66,000 138,000 Req 1B Total Payment $ 120,000 126,000 138,000 Assuming an annual discount rate of 11%, calculate the present value and the total cost. Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1,…
A small businessman is about to acquire a machine whose price is $ 15,000 with VAT included. If the cash purchase obtains a 15% discount, if you purchase it on credit you must pay an initial installment equivalent to 25% and the balance in six installments, with a grace period of one month without interest payment and the rest with a 3.8 % monthly. It asks:to. Payment in cash,b. The installment to pay on creditc. The total amount paid on credit
XYZ Construction Inc. wants to purchase a new pick-up truck. The price for the new truck is $43,040. The dealer allows XYZ to trade-in the old truck for $7,162. XYZ can payback the remaining balance through a 4-year payment plan. Given the agreed interest rate is 3%: How much is the monthly payment?
A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next 3 years. If you pay the entire bill immediately, you can take a 10% discount from the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 5 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2 Which is a better deal? b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Which is a better deal?
You want to purchase an automobile for $22,800. The dealer offers you two options. Option 1 is 0% financing for 48 months. Option 2 offers 2.9% financing for 72 months. A) Compute the monthly payments for each option. Show work to justify your answer. N 1% PV PMT FV P/Y C/Y Option 1: Monthly Payment is: Option 2: Monthly Payment is: N 1% PV PMT FV P/Y C/Y B) Compute the total cost for each option. Show work to justify your answer.
Two plans are available for a company to obtain automobiles for its salesmen. How many miles must the cars be driven each year for the two plans to have the same costs? Use an interest rate of 10%. Plan A: Lease the cars and pay PO.52 per mile. Plan B: Purchase the cars for P9.238 and economic life of three years after which it can be sold for P2,021, Gas and oil cost PO.07 per mile. Insurance is P500 per year.
Ray and Rachel are considering the purchase of two deluxe kitchen ovens. The first store offers thee two ovens for $3,500 with payment due today. The second store offers the two ovens for $3,700 due in one year. Required: 1-a. Assuming an annual discount rate of 9%, calculate the present value. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Present Value Store 1 Store 2 1-b. From which store should Ray and Rachel buy their ovens? Store 1 Store 2
The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for the furniture in three equal annual end-of-the-year payments of $750 each with the first payment to be made one year from today. If the discount rate is 5%, what is the present value of the furniture payments? O $2,333.39 $2,673.01 O $2,214.27 O $2,042.44