Present and future values of 1 at 11% are presented below. PV of $1 FV of $1 PVA of $1 FVA of $1 1 0.90090 1.11000 0.90090 1.0000 2.1100 2 0.81162 1.23210 1.71252 2.44371 3.3421 30.73119 1.36763 4 0.65873 1.51807 0.59345 1.68506 3.10245 4.7097 5 3.69590 6.2278 6 0.53464 1.87041 4.23054 7.9129 Polo Publishers purchased a multi-color offset press with terms of$50,000 to be paid at the date of purchase, and a noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rate implicit in the purchase contract is11%. Polo would record the asset at: Multiple Choice $73,918. $123.918Present and future values of 1 at 11% are presented below.PV of $1 FV of $1 PVA of $1 FVA of $10.90090 1.11000 0.90090 1.00001122 0.81162 1.23210 1.71252 2.11003 0.73119 1.36763 2.44371 3.34214 0.65873 1.51807 3.10245 4.709750.59345 1.68506 3.695906.22787.91296 0.53464 1.87041 4.23054Polo Publishers purchased a multi-color offset press with terms of $50,000 to be paid at the date of purchase, and anoninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rateimplicit in the purchase contract is 11%. Polo would record the asset at:Multiple Choice.$73,918$123918?

Individuals and organizations can use present value to calculate the current monetary equivalent of…

Answered: purchase, and a noninterest-bearing…

purchase, and a noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The i tat: Multiple Choice $73,918. $123.918

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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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Present and future values of 1 at 11% are presented below. PV of $1 FV of $1 PVA of $1 FVA of $1 1 0.90090 1.11000 0.90090 1.0000 2.1100 2 0.81162 1.23210 1.71252 2.44371 3.3421 3
0.73119 1.36763 4 0.65873 1.51807 0.59345 1.68506 3.10245 4.7097 5 3.69590 6.2278 6 0.53464 1.87041 4.23054 7.9129 Polo Publishers purchased a multi-color offset press with terms of
$50,000 to be paid at the date of purchase, and a noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rate implicit in the purchase contract is
11%. Polo would record the asset at: Multiple Choice $73,918. $123.918
Present and future values of 1 at 11% are presented below.
PV of $1 FV of $1 PVA of $1 FVA of $1
0.90090 1.11000 0.90090 1.0000
1
1
2
2 0.81162 1.23210 1.71252 2.1100
3 0.73119 1.36763 2.44371 3.3421
4 0.65873 1.51807 3.10245 4.7097
5
0.59345 1.68506 3.69590
6.2278
7.9129
6 0.53464 1.87041 4.23054
Polo Publishers purchased a multi-color offset press with terms of $50,000 to be paid at the date of purchase, and a
noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rate
implicit in the purchase contract is 11%. Polo would record the asset at:
Multiple Choice.
$73,918
$123918
?

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