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On 1/1/2017, Ellie Corporation purchases (and receives) a machine. Ellie signs an agreement to make a single payment of $400,000 on 12/31/18 for the machine.

On 1/1/2017, Ellie Corporation purchases (and receives) a machine. Ellie signs an agreement to make a single payment of $400,000 on 12/31/18 for the machine. Assume that the market interest rate for this arrangement is 8% annually.

Required: What is the present value of this payment arrangement?

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