|
|
|
 Topic: PP&E deferred payments ( Topic Closed)
|
 
|
| Author |
|
syousuf
Regular
Joined: 18 Apr 2008
Location: Saudi Arabia
Online Status: Offline
Posts: 169
|
| Posted: 09 Mar 2011 at 02:13 | IP Logged
|
|
|
A corporation purchased land by issuing a $150,000, 3 year non interest bearing note on Jan 1 of year 1 when the market rate of interest was 8%, the note is to be repaid in 3 equal installments of $50,000 on Dec 31 of year 1,yr2 yr 3.
What could be the answer, please need help
I got 1 answer =$50,000*2,57710=128,855 How 2.57710 is calculated
|
| Back to Top |
|
| |
lynxcat
Contributor
Joined: 10 May 2010
Location: United States
Online Status: Offline
Posts: 84
|
| Posted: 09 Mar 2011 at 02:52 | IP Logged
|
|
|
$128,855 is correct. You must look at the Present Value of an Ordinary
Annuity $1 for 3 years, 8%. This gives you 2.55710.
Multiply your payments by 2.55710 and you reach the correct answer of
$128,855.
__________________
REG: April 2012
FAR: 83
AUD: February 27, 2012
BEC: 80
|
| Back to Top |
|
| |
mmilito
Newbie
Joined: 08 Mar 2011
Location: United States
Online Status: Offline
Posts: 18
|
| Posted: 09 Mar 2011 at 06:40 | IP Logged
|
|
|
That 2.57710 is the present value factor of the annuity of
1 and that will either use the present value table (given)
or the formula for present value in Excel spreadsheet on
the test
|
| Back to Top |
|
| |
|
|
Sorry, you can NOT post a reply.
This topic is closed.
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum
|
 Copyright ©2001-2010 Web Wiz Guide
This page was generated in 0.1250 seconds.
|
Active Topics 
Memberlist 
Search 
Help
Register 
Login
