Samos, Inc. purchased certain plant assets under a deferred payment contract. The agreement was to pay $75,000 at year-end for each of the next three years. The plant assets should be valued at present value of a $75,000 annuity for three years discounted at the market interest rate. present value of a $75,000 annuity for three years discounted at the bank prime interest rate. $225,000. $225,000 plus imputed interest.
Samos, Inc. purchased certain plant assets under a deferred payment contract. The agreement was to pay $75,000 at year-end for each of the next three years. The plant assets should be valued at present value of a $75,000 annuity for three years discounted at the market interest rate. present value of a $75,000 annuity for three years discounted at the bank prime interest rate. $225,000. $225,000 plus imputed interest.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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Samos, Inc. purchased certain plant assets under a deferred payment contract. The agreement was to pay $75,000 at year-end for each of the next three years. The plant assets should be valued at
present value of a $75,000 annuity for three years discounted at the market interest rate.
present value of a $75,000 annuity for three years discounted at the bank prime interest rate.
$225,000.
$225,000 plus imputed interest.
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