As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $99,000 cash paid today, $99,000 to be paid in one year, and an annuity of $35,000 to be paid each year for 6 years. Required: What is the present value of the package assuming an interest rate of 11 percent? (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value 43

As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $99,000 cash paid today, $99,000 to be paid in one year, and an annuity of $35,000 to be paid each year for 6 years. Required: What is the present value of the package assuming an interest rate of 11 percent? (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value 43

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...

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The D.J. Masson Corporation needs to raise $500,000 for 1 year to supply working capital to a new store. Masson buys from its suppliers on terms of 3/10, net 90, and it currently pays on the 10th day and takes discounts. However, it could forgo the discounts, pay on the 90th day, and thereby obtain the needed $500,000 in the form of costly trade credit. What is the effective annual interest rate of this trade credit?
On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
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As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $109,000 cash paid today, $109,000 to be paid in one year, and an annuity of $30,000 to be paid each year for 8 years. Required: What is the present value of the package assuming an interest rate of 9 percent? (Future Value of $1. Present Value of $1. Euture Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value
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