Knowledge Check Davis Inc. has budgeted payments of $11,600 a year to buy new equipment. At a 7% discount rate, the company plans to finance annual payments for 5 years with payments at the end of each year. What is the cost of equipment that Davis can afford? (For calculation purposes, use five decimal places as displayed in the factor table provided. Round your answer to two decimal places (e.g., 52.75).) Table 4: Present Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 1 .96154 .95238 .94340 .93458 .92593 2 1.88609 1.85941 1.83339 1.80802 1.78326 3 2.77509 2.72325 2.67301 2.62432 2.57710 4 3.62990 3.54595 3.46511 3.38721 3.31213 5 4.45182 4.32948 4.21236 4.10020 3.99271 Cost of equipment
Knowledge Check Davis Inc. has budgeted payments of $11,600 a year to buy new equipment. At a 7% discount rate, the company plans to finance annual payments for 5 years with payments at the end of each year. What is the cost of equipment that Davis can afford? (For calculation purposes, use five decimal places as displayed in the factor table provided. Round your answer to two decimal places (e.g., 52.75).) Table 4: Present Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 1 .96154 .95238 .94340 .93458 .92593 2 1.88609 1.85941 1.83339 1.80802 1.78326 3 2.77509 2.72325 2.67301 2.62432 2.57710 4 3.62990 3.54595 3.46511 3.38721 3.31213 5 4.45182 4.32948 4.21236 4.10020 3.99271 Cost of equipment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Knowledge Check
Davis Inc. has budgeted payments of $11,600 a year to buy new equipment. At a 7% discount rate, the company plans to finance
annual payments for 5 years with payments at the end of each year. What is the cost of equipment that Davis can afford? (For
calculation purposes, use five decimal places as displayed in the factor table provided. Round your answer to two decimal places (e.g.,
52.75).)
Table 4: Present Value of an Annuity of 1
(n)
Payments
4%
5%
6%
7%
8%
1
.96154
.95238
.94340
.93458
.92593
2
1.88609
1.85941
1.83339
1.80802
1.78326
3
2.77509
2.72325
2.67301
2.62432
2.57710
4
3.62990
3.54595
3.46511
3.38721
3.31213
5
4.45182
4.32948
4.21236
4.10020
3.99271
Cost of equipment
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