1. On July 1, 2020, Ed Yates signed an agreement to operate as a franchisee of Kwik Foods, Inc., for an initial franchise fee of P60,000. Of this amount, P20,000 was paid when the agreement was signed and the balance is payable in four equal annual payments of P10,000 beginning July 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. Yates' credit rating indicates that he can borrow money at 14% for a loan of this type. Yates should record the acquisition cost of the franchise on July 1, 2020 at
2. How much must be invested now to receive P20,000 for 15 years if the first P20,000 is received today and the rate is 9%?
3. What will be the balance on September 1, 2020 in a fund which is accumulated by making P12,000 annual deposits each September 1 beginning in 2000, with the last deposit being made on September 1, 2020? The fund pays interest at 8% compounded annually.
4. Henson Company wishes to accumulate P200,000 by May 1, 2022 by making 8 equal annual deposits beginning May 1, 2001 to a fund paying 8% interest compounded annually. What is the required amount of each deposit?