Required information [The following information applies to the questions displayed below) On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of $115,000 at the end of the 7th year. b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to $490,000 will be deposited on January 1 of this year c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112,500 at the end of the second year, and $150,000 at the end of the third year. d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (d, determine the present value of this obligation. Note: Round your intermedi and final answer to nearest Present value Q homm dollar.
Required information [The following information applies to the questions displayed below) On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of $115,000 at the end of the 7th year. b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to $490,000 will be deposited on January 1 of this year c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112,500 at the end of the second year, and $150,000 at the end of the third year. d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (d, determine the present value of this obligation. Note: Round your intermedi and final answer to nearest Present value Q homm dollar.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![Required information
[The following information applies to the questions displayed below]
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) (
EV of $1. PV of $1. EVA of $1. and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of
$115,000 at the end of the 7th year.
b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to
$490,000 will be deposited on January 1 of this year.
c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first
year, $112.500 at the end of the second year, and $150,000 at the end of the third year
d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance.
The note will be paid in five equal year-end payments starting on December 31 of this year.
3. In transaction (d. determine the present value of this obligation.
Note: Round your intermediate and final answer to nearest whole dollar
Present value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7ccfa45-6aae-48f9-b149-b7701b5f120a%2Ff7c4c23b-5fc1-4795-b019-84e06143491e%2Fhekdzq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below]
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) (
EV of $1. PV of $1. EVA of $1. and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of
$115,000 at the end of the 7th year.
b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to
$490,000 will be deposited on January 1 of this year.
c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first
year, $112.500 at the end of the second year, and $150,000 at the end of the third year
d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance.
The note will be paid in five equal year-end payments starting on December 31 of this year.
3. In transaction (d. determine the present value of this obligation.
Note: Round your intermediate and final answer to nearest whole dollar
Present value
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