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followed by one payment of $45,000 at the end of two years, which option would you recommend? The current market rate of interest is 9%. Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, e.g. 5,275.25.)

followed by one payment of $45,000 at the end of two years, which option would you recommend? The current market rate of interest is 9%. Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, e.g. 5,275.25.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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As the CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. If the vendor is offering repayment options of $9,000 at the end of each year for five years, or no payment for two years followed by one payment of $45,000 at the end of two years, which option would you recommend? The current market rate of interest is 9%. Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, e.g. 5,275.25.) Option 1 Option 2 tA Present Value ✓would be recommended.
Transcribed Image Text:As the CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. If the vendor is offering repayment options of $9,000 at the end of each year for five years, or no payment for two years followed by one payment of $45,000 at the end of two years, which option would you recommend? The current market rate of interest is 9%. Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, e.g. 5,275.25.) Option 1 Option 2 tA Present Value ✓would be recommended.
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