Question

Не On January 1 of this year, Shannon Company completed the following transactions (assume a 9 % 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 $61,600 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 $29,600 immediately. c. Established a savings account by depositing a single amount that willl increase to $93,200 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 9 equal annual year-end payments of $41,600 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? (Round your answer to nearest whole dollar.) Cost of the truck b. Which option for the office building results in the lowest present value? Pay in single installment Pay in three installments C. What single amount must be deposited in this account on January 1 of this year? (Round your answer to nearest whole dollar.) Amount to deposit

Answer 1

Pag Date: 3-1 Page No the Cost Pregent valu pamant trick a. 61600 xResent valu feutor Bresent Valu 17 3n) $61600 x O7721834OOS 47567 Cost truk 47567 it Shanmon Si1600 ophon at thre yeer the end eah C th nent $11600 xPreent valu Amuihy te $11600 X 2-53129166597 29363.02 513) Breaent valuu 17 t29600 immaedialy onpaug paya 29600 Ophon feacnt vals Ophon for lowst prn Pay in thru installmint builting Ans: Yults in ofiu the value

Pase 93200 x Psent valuu fechor 9/- hy Proant valu $93200 X 0.4703424482 $50984 1 Ans Sinyl anaunt that Tanuany 1 $50984 depotted in this must b acuount On 41600 x Rent valu anmuy tacr ( d Preint value ) $41600 x 5.99524639412 $ 249५०2- mut b depatte Single that Sum 249402 -7

Paye Date: .Page No.: 3-2 Disiounhny fautor (Pvel tio) O.90909030030 0.826 4462o OTS1314800 Preuent Yeav Amount $21500 $31500 51500 valeue 1৩5५5.५४ $26033.06 33692-7 $8427 2 Total Rund valu $8427 Besent valdInhmunt 0-3 $15200 x Pesen valu annuiy fauor (68yer) + $152000 x Resent valu fuckr6 8h year) Pesent value I5200 X 6.2037338014 152000 X O.6274123713 $94383 + gs367 $189754 $189756 रियcd vatuu ef hnvem=