P9-11 (Algo) Computing Present Values LO9-7, 9-8 [The following information applies to the questions displayed below.] On January...

70.2K

Verified Solution

Question

Finance

P9-11 (Algo) Computing Present Values LO9-7, 9-8
[The following information applies to the questionsdisplayed below.]

On January 1, Boston Company completed the following transactions(use a 7% annual interest rate for all transactions): (FV of $1, PVof $1, FVA of $1, and PVA of $1) (Use the appropriatefactor(s) from the tables provided.)
Promised to pay a fixed amount of $7,700 at the end of eachyear for eight years and a one-time payment of $118,400 at the endof the 8th year.
Established a plant remodeling fund of $492,550 to be availableat the end of Year 9. A single sum that will grow to $492,550 willbe deposited on January 1 of this year.
Agreed to pay a severance package to a discharged employee. Thecompany will pay $76,700 at the end of the first year, $114,200 atthe end of the second year, and $151,700 at the end of the thirdyear.
Purchased a $178,500 machine on January 1 of this year for$35,700 cash. A five-year note is signed for the balance. The notewill be paid in five equal year-end payments starting on December31 of this year.
Required:
1. In transactions (1-4), determinethe present value of the debt. (Round your answer tonearest whole dollar.)
Present value

Answer & Explanation Solved by verified expert

3.7 Ratings (600 Votes)

Solution A A sum of 7700 is to be paid at the end of each year for 8 years and the principal amount 118400 to be paid at the end of 8th year PV 77001007 770010072 770010073 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

P9-11 (Algo) Computing Present Values LO9-7, 9-8[The following information applies to the questionsdisplayed below.]On January 1, Boston Company completed the following transactions(use a 7% annual interest rate for all transactions): (FV of $1, PVof $1, FVA of $1, and PVA of $1) (Use the appropriatefactor(s) from the tables provided.)Promised to pay a fixed amount of $7,700 at the end of eachyear for eight years and a one-time payment of $118,400 at the endof the 8th year.Established a plant remodeling fund of $492,550 to be availableat the end of Year 9. A single sum that will grow to $492,550 willbe deposited on January 1 of this year.Agreed to pay a severance package to a discharged employee. Thecompany will pay $76,700 at the end of the first year, $114,200 atthe end of the second year, and $151,700 at the end of the thirdyear.Purchased a $178,500 machine on January 1 of this year for$35,700 cash. A five-year note is signed for the balance. The notewill be paid in five equal year-end payments starting on December31 of this year.Required:1. In transactions (1-4), determinethe present value of the debt. (Round your answer tonearest whole dollar.)Present value