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The company completed construction of a new plant in Saskatchewan on December 1 5 , 2 0 2 3 , to help it better meet
The company completed construction of a new plant in Saskatchewan on December
to help it better meet the needs of its customers west of Ontario. The costs
associated with this construction project were as follows:
Land $
Construction contract:
building, years of useful life, residual value of $
Equipment. See below
Furniture
Training costs employees learning to use equipment
Avoidable interest calculated at on financing of construction
project from inception until put in use
The equipment purchased for the new plant was bought on a deferred payment contract
signed on December FFI issued a $million, fiveyear, noninterestbearing note
payable to the equipment supplier at a time when the annual market rate of interest was
The note will be repaid with five equal payments made on December of each year,
beginning in Show calculations using the Excel function PV Round final amounts to
the nearest dollar.
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