Question
1. Charlie's Construction Co. acquired a new $800,000 backhoe on April 1, 2014. Charlie's will make six annual payments based upon 8% interest compounded annually,
1. Charlie's Construction Co. acquired a new $800,000 backhoe on April 1, 2014. Charlie's will make six annual payments based upon 8% interest compounded annually, starting on March 31, 2015. How much will each payment be?
$173,052
$109,052
$504,136
$160,234
2. On January 31, 2016, Manning Company acquired a new machine by paying $40,000 cash and agreeing to pay $20,000 annually for four years, beginning on January 31, 2017. Assuming an interest rate of 10%, Manning should record the acquisition cost of the machine on January 31, 2016, at
$103,397.
$102,092.
$120,000.
$109,737.
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