MSC sold a piety of machinery which it purchased 5 years and 5 months ago, At the time of purchase the machinery had life of 10 years and cost $100.000 it had no salvage value and was being depreciated using the sum of the year's digit's depreciation method Five years' worth of depreciation have been taken but MSC must bring the depreciation up to date for 5 month. the machinery was sold for $15.000 cash. MSC purchased a specially built machine by issuing $1000.000 five year zero interest note to Cutting edge manufacturing Co MSC is to pay off the note in five $20.000 installments to be made at the end of each of the years. the prevailing interest rate is 10%. On this transaction incurable the purchase of the machine and also the first payment (PV factor 3)