Question
On January 1, 2014, Shannon Company completed the following transactions (assume a 14 percent annual interest rate): (FV of $1, PV of $1, FVA of
On January 1, 2014, Shannon Company completed the following transactions (assume a 14 percent annual interest rate): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) |
a. | Bought a delivery truck and agreed to pay $55,000 at the end of three years. |
b. | Rented an office building and was given the option of paying $11,600 at the end of each of the next three years or paying $28,000 immediately. |
c. | Established a savings account by depositing a single amount that will increase to $91,600 at the end of seven years. |
d. | Decided to deposit a single sum in the bank that will provide 3 equal annual year-end payments of $35,000 to a retired employee (payments starting December 31, 2014). |
a. | What is the cost of the truck that should be recorded at the time of purchase? |
b. | Which option for the office building should the company select? |
multiple choice
|
c. | What single amount must be deposited in this account on January 1, 2014? |
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