Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made the following expenditures related to the acquisition of the land, building, and equipment for the factory: Purchase price of the land $1,200,000 Demolition and removal ofold building 80,000 Clearing and grading the land before construction 150,000 1lJlarious closing costs in connection with acquiring the land 42,000 Architect's fee for the plans for the new building 50,000 Payments to Maxtor for building construction 3,250,000 Equipment purchased 860,000 Freightcharges on equipment 32,000 Trees, plants, and other landscaping 45,000 Installation of a sprinkler system for the landscaping 5,000 Cost to build special platforms and install wiring for the equipment 12.000 Cost of trial runs to ensure proper installation of the equipment 1000 Fire and theft insurance on the factory for the first year of use 24,000 In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $16,000 cash and signed a noninterest-bearing note requiring the payment of $70,000 in one year. An interest rate of T96 properly reflects the time value of money for this type of loan