Calculate answers to the following scenarios. a. Jackson Company purchased machinery by executing a $50,000 non-interest-bearing note due in four years. Assuming the going rate for similar notes is 6 percent and using the appropriate present value

table, for how much should the machinery be recorded? b. Wendy Kwon is making bank deposits of $3,000 at the beginning of each year for three years for purposes of buying a car. Assuming an interest rate of 7 percent compounded annually, how much will she have saved for the purchase at the end of year 3? (Calculate manually and round to the nearest dollar.) c. Ashton Jones would like to make a lump-sum deposit today so that he can withdraw $15,000 at the end of each year for the next three years. Assuming a 9 percent interest rate and using the appropriate present value table, what should she invest today?


a. $39,600 [50,000 x 0.792 (PV of $1)]
b. $10,124 [$3,000 x 1.06 = $3,180; ($3,180 + $3,000 ) x 1.06 = $6,551; ($6,551 + $3,000 ) x 1.06 = $10,124]
c. $37,965 [15,000 x 2.531 (PV of O.A.)]

Business

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