On January 1, 2017, Shannon Company completed the following transactions (assume a 8 percent annual interest rate): Use Table 9C.1, Table 9C.2 (Round time value factor to 4 decimal places. Round intermediate and final answers to the nearest whole dollar.) a. Bought a delivery truck and agreed to pay $90,000 at the end of four years. b. Rented an office building and was given the option of paying $15,500 at the end of each of the next four years or paying $48,000 immediately. C. Established a savings account by depositing a single amount that will increase to $85,000 at the end of six years. d. Decided to deposit a single sum in the bank that will provide 10 equal annual year-end payments of $50,000 to a retired employee (payments starting December 31, 2017). Required: 1. In (a), what is the cost of the truck that should be recorded at the time of purchase? Cost of the truck 2. In (b), which option for the office building should the company select? O Pay 48,000 immediately O Pay 15,500 at the end of the next four years 3. In (c), what single amount must be deposited in this account on January 1, 2017? Single amount 4. In (d), what single sum must be deposited in the bank on January 1, 2017? Single sum Table 9C.1 Present Value of $1, p = 1/(1 + i)n Periods 1.5% 1.75% 2% 2.25% 2.5% 2.75% 3% 3.25% 3.5% 0.9852 0.9828 0.9804 0.9780 0.9756 0.9732 0.9709 0.9685 0.9662 0.9707 0.9659 0.9612 0.9565 0.9518 0.9472 0.9426 0.9380 0.9335 0.9563 0.9493 0.9423 0.9354 0.9286 0.9218 0.9151 0.9085 0.9019 4 0.9422 0.9330 0.9238 0.9148 0.9060 0.8972 0.8885 0.8799 0.8714 0.9283 0.9169 0.9057 0.8947 0.8839 0.8732 0.8626 0.8522 0.8420 0.9145 0.9011 0.8880 0.8750 0.8623 0.8498 0.8375 0.8254 0.8135 0.9010 0.8856 0.8706 0.8558 0.8413 0.8270 0.8131 0.7994 0.7860 0.8877 0.8704 0.8535 0.8369 0.8207 0.8049 0.7894 0.7742 0.7594 0.8746 0.8554 0.8368 0.8185 0.8007 0.7834 0.7664 0.7499 0.7337 0.8617 0.8407 0.8203 0.8005 0.7812 0.7624 0.7441 0.7263 0.7089 0.8489 0.8263 0.8043 0.7829 0.7621 0.7420 0.7224 0.7034 0.6849 0.8364 0.8121 0.7885 0.7657 0.7436 0.7221 0.7014 0.6813 0.6618 0.8240 0.7981 0.7730 0.7488 0.7254 0.7028 0.6810 0.6598 0.6394 0.8118 0.7844 0.7579 0.7323 0.7077 0.6840 0.6611 0.6391 0.6178 0.7999 0.7709 0.7430 0.7162 0.6905 0.6657 0.6419 0.6189 0.5969 0.7880 0.7576 0.7284 0.7005 0.6736 0.6479 0.6232 0.5995 0.5767 0.7764 0.7446 0.7142 0.6851 0.6572 0.6305 0.6050 0.5806 0.5572 0.7649 0.7318 0.7002 0.6700 0.6412 0.6137 0.5874 0.5623 0.5384 0.7536 0.7192 0.6864 0.6552 0.6255 0.5972 0.5703 0.5446 0.5202 0.7425 0.7068 0.6730 0.6408 0.6103 0.5813 0.5537 0.5275 0.5026 0.6398 0.5942 0.5521 0.5130 0.4767 0.4431 0.4120 0.3831 0.3563 40 0.5513 0.4996 0.4529 0.4106 0.3724 0.3379 0.3066 0.2782 0.2526 0.4750 0.4200 0.3715 0.3287 0.2909 0.2576 0.2281 0.2021 0.1791 Periods 3.75% 4% 4.5% 5% 6% 7% 8% 9% 10% 0.9639 0.9615 0.9569 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.9290 0.9246 0.9157 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 3 0.8954 0.8890 0.8763 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.8631 0.8548 0.8386 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.8319 0.8219 0.8025 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.8018 0.7903 0.7679 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.7728 0.7599 0.7348 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.7449 0.7307 0.7032 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 9 0.7180 0.7026 0.6729 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.6920 0.6756 0.6439 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.6670 0.6496 0.6162 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.6429 0.6246 0.5897 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.6197 0.6006 0.5643 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 14 0.5973 0.5775 0.5400 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.5757 0.5553 0.5167 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.5549 0.5339 0.4945 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.5348 0.5134 0.4732 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.5155 0.4936 0.4528 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 19 0.4969 0.4746 0.4333 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.4789 0.4564 0.4146 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 30 0.3314 0.3083 0.2670 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 40 0.2293 0.2083 0.1719 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 50 0.1587 0.1407 0.1107 0.0872 0.0543 0.0339 0.0213 0.0134 0.0085 12 13 Table 9C.2 Present Value of Annuity of $1, p = [1 1/(1 + i)"]/i Periods* 1.5% 1.75% 2% 2.25% 2.5% 2.75% 3% 3.25% 3.5% 0.9852 0.9828 0.9804 0.9780 0.9756 0.9732 0.9709 0.9685 0.9662 2 1.9559 1.9487 1.9416 1.9345 1.9274 1.9204 1.9135 1.9066 1.8997 2.9122 2.8980 2.8839 2.8699 2.8560 2.8423 2.8286 2.8151 2.8016 3.8544 3.8309 3.8077 3.7847 3.7620 3.7394 3.7171 3.6950 3.6731 4.7826 4.7479 4.7135 4.6795 4.6458 4.6126 4.5797 4.5472 4.5151 5.6972 5.6490 5.6014 5.5545 5.5081 5.4624 5.4172 5.3726 5.3286 6.5982 6.5346 6.4720 6.4102 6.3494 6.2894 6.2303 6.1720 6.1145 7.4859 7.4051 7.3255 7.2472 7.1701 7.0943 7.0197 6.9462 6.8740 8.3605 8.2605 8. 1622 8.0657 7.9709 7.8777 7.7861 7.6961 7.6077 10 9.2222 9.1012 8.9826 8.8662 8.7521 8.6401 8.5302 8.4224 8.3166 10.0711 9.9275 9.7868 9.6491 9.5142 9.3821 9.2526 9.1258 9.0016 10.9075 10.7395 10.5753 10.4148 10.2578 10.1042 9.9540 9.8071 9.6633 11.7315 11.5376 11.3484 11.1636 10.9832 10.8070 10.6350 10.4669 10.3027 12.5434 12.3220 12.1062 11.8959 11.6909 11.4910 11.2961 11.1060 10.9205 13.3432 13.0929 12.8493 12.6122 12.3814 12.1567 11.9379 11.7249 11.5174 14.1313 13.8505 13.5777 13.3126 13.0550 12.8046 12.5611 12.3244 12.0941 14.9076 14.5951 14.2919 13.9977 13.7122 13.4351 13.1661 12.9049 12.6513 18 15.6726 15.3269 14.9920 14.6677 14.3534 14.0488 13.7535 13.4673 13.1897 16.4262 16.0461 15.6785 15.3229 14.9789 14.6460 14.3238 14.0119 13.7098 17.1686 16.7529 16.3514 15.9637 15.5892 15.2273 14.8775 14.5393 14.2124 30 24.0158 23.1858 22.3965 21.6453 20.9303 20.2493 19.6004 18.9819 18.3920 40 29.9158 28.5942 27.3555 26.1935 25.1028 24.0781 23.1148 22.2084 21.3551 50 34.9997 33.1412 31.4236 29.8344 28.3623 26.9972 25.7298 24.5518 23.4556 Periods* 3.75% 4% 4.5% 5% 6% 7% 8% 9% 10% 0.9639 0.9615 0.9569 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 1.8929 1.8861 1.8727 1.8594 1.8334 1.8080 1.7833 1.7591 1.7355 2.7883 2.7751 2.7490 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 3.6514 3.6299 3.5875 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 4.4833 4.4518 4.3900 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 5.2851 5.2421 5.1579 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 6.0579 6.0021 5.8927 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 6.8028 6.7327 6.5959 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 9 7.5208 7.4353 7.2688 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 8.2128 8.1109 7.9127 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 8.8798 8.7605 8.5289 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 9.5227 9.3851 9.1186 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 10.1424 9.9856 9.6829 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 10.7396 10.5631 10.2228 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 11.3153 11.1184 10.7395 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 11.8702 11.6523 11.2340 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 12.4050 12.1657 11.7072 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 18 12.9205 12.6593 12. 1600 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 19 13.4173 13.1339 12.5933 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 20 13.8962 13.5903 13.0079 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 30 17.8292 17.2920 16.2889 15.3725 13.7648 12.4090 11.2578 10.2737 9.4269 20.5510 19.7928 18.4016 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 50 22.4345 21.4822 19.7620 18.2559 15.7619 13.8007 12.2335 10.9617 9.9148 *There is one payment each period. 16