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Option 1: Purchase the pizza oven with payments of $11,100 made semi-annually for 3 years. The interest rate on t -8%. Option 2: Purchase the pizza oven with annual payments for 3 years of $23,200 at 9% interest. For each of the two option, using tables, a financial calculator or Excel function determine from a quantitative persp two options should be pursued by Crane? (For calculation purposes, use 5 decimal places as displayed in the factor table final answers to 2 decimal places, eg. 5,275.25.) Click here to view Table A.4- PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Option 1 Option 2

Option 1: Purchase the pizza oven with payments of $11,100 made semi-annually for 3 years. The interest rate on t -8%. Option 2: Purchase the pizza oven with annual payments for 3 years of $23,200 at 9% interest. For each of the two option, using tables, a financial calculator or Excel function determine from a quantitative persp two options should be pursued by Crane? (For calculation purposes, use 5 decimal places as displayed in the factor table final answers to 2 decimal places, eg. 5,275.25.) Click here to view Table A.4- PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Option 1 Option 2

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject :- Accounting 

m periods 12345 67890 10 NPBMHKD890 12345 257 1288 8780 2% .99039 1.94156 2.88388 11 PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 2% 3% 4% .97561 .97087 96154 1.92742 2.85602 1.91347 2.82861 3.80773 3.76197 3.71710 4.71346 4.64583 5.60143 5.50813 6.47199 6.34939 7.32548 7.17014 8.16224 7.97087 8.98259 8.75206 3.62990 4.57971 4.45182 |PVF-OA= 5% 6% 95238 94340 1.88609 1.85941 1.83339 2.77509 2.72325 2.67301 3.54595 3.46511 4.32948 4.21236 1 (1+i) 5.41719 524214 5.07569 4.91732 6.23028 6.00205 5.78637 5.58238 7.01969 6.73274 6.46321 6.20979 5.74664 7.78611 7.43533 7.10782 6.80169 6.24689 8.53020 8.11090 7.72173 7.36009 6.71008 14 9.78685 9.51421 9.25262 8.76048 8.30641 7.88687 7.13896 12 10.57534 10.25776 9.95400 9.38507 8.86325 8.38384 7.53608 13 11.34837 10.98319 10.63496 9.98565 9.39357 8.85268 7.90378 12.10625 11.69091 11.29607 10.56312 9.89864 9.29498 8.24424 15 12.84926 12.38138 11.93794 11.11839 10.37966 9.71225 8.55948 16 13.57771 13.05500 12.56110 11.65230 10.83777 10.10590 17 14.29187 13.71220 13.16612 12.16567 11.27407 10.47726 18 14.99203 14.35336 13.75351 12.65930 11.68959 10.82760 19 15.67846 14.97889 14.32380 13.13394 12 9632 11.15812 20 16.35143 15.58916 14.87747 13.59033 12.4 221 11.46992 8% 92593 1.78326 2.57710 3.31213 3.99271 17.87684 15.98277 18.32703 16.32959 18.76411 16.66306 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 5.53482 5.33493 5.14612 4.96764 4.48732 5.99525 5.75902 5.53705 5.32825 4.77158 6.41766 6.14457 5.88923 5.65022 5.01877 21.39541 20.00043 17.58849 15.59281 13.92909 21.84918 20.38877 17.87355 15.80268 14.08404 9% 10% 11% 12% 15% 91743 .90909 90090 89286 86957 1.75911 1.73554 1.71252 1.69005 1.62571 2.53130 2.48685 2.44371 240183 2.28323 3.23972 3.16986 3.10245 3.03735 2.85498 3.88965 3.79079 3.69590 3.60478 3.35216 15.41502 14.02916 12.82115 11.76408 10.01680 15.93692 14.45112 13.16800 12.04158 10.20074 16.44361 14.85684 13,48857 12.30338 10.37106 16.93554 15.24696 13.79864 12.55036 10.52876 17.41315 15.62208 14.09394 12.78336 10.67478 17.01121 16.18455 22 17.65805 16.76541 18.29220 17.33211 18.91393 17.88499 19.52346 18.42438 26 20.12104 18.95051 20.70690 19.46401 21.28127 19.96489 14.37519 13.00317 10.80998 9.92897 9.16095 8.48306 7.89566 6.49056 14.64303 13.21053 10.93516 10.02658 9.23722 8.45780 7.94255 6.51353 14.89813 13.40616 11.05108 10.11613 9.30657 8.60162 7.98442 6.53351 29 21.84438 20.45355 19.18845 16.98371 15,14107 13.59072 11.15841 10.19828 9.35961 8.65011 8.02181 6.55088 30 22.39646 20.93029 19.60044 17.29203 15.37245 13.76483 11.25778 10.27365 9.42691 8.69379 8.06518 6.56598 6.80519 6.49506 6.20652 5.93770 5.23371 7.16073 6.81369 6.49236 6.19437 5.42062 7.48690 7.10336 6.74987 6.42355 5.58315 7.78615 7.36669 6.98187 6.62817 5.72448 8.06069 7.60608 7.19087 6.81086 5.84737 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424 9.12164 8.54363 8.02155 7.54879 7.11963 6.04716 9.37189 8.75563 8.20141 7.70162 7.24967 6.12797 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 9.29224 8.64869 8.07507 7.56200 6.31 9.44243 8.77154 8.17574 7.64465 6.35866 9.58021 8.88322 8.26643 7.71843 6.39884 9.70661 8.98474 8.34814 7.78432 6.43377 9.82258 9.07704 8.42174 7.84314 6.46415 31 22.93770 11.34980 10.34280 9.47901 8.73315 8.08499 6.57911 32 23.46833 11.43500 10.40624 9.52638 8.76860 811159 6.59053 33 23.98856 22.29188 20.76579 18.14765 16.00255 14.23023 11.51389 10.46444 9.56943 8.80054 8.13535 6.60046 34 24.49859 22.72379 21.13184 18.41120 16.19290 14.36814 11.58693 10.51784 9.60858 8.82932 8.15656 6.60910 35 24.99862 23.14516 21.48722 18.66461 16.37419 14.49825 11.65457 10.56682 9.64416 8.85524 8.17550 6.61661 36 25.48884 23.55625 21.83225 18.90828 16.54685 14.62099 1171719 10.61176 9.67651 8.87859 8.19241 6.62314 37 25.96945 23.95732 22.16724 19.14258 16.71129 14.73678 11.77518 10.65299 9.70592 8.89963 8.20751 6.62682 38 26.44064 24.34850 22.49246 19.36786 15.86789 14.84602 11.82887 10.69082 9.73265 891859 8.22099 6.63375 39 26.90259 24.73034 22.80822 19.58448 17.01704 14.94907 11.87858 10.72552 9.75697 8.93567 823303 6.63805 40 27.35548 25.10278 23.11477 19.79277 17.15909 15.04630 11-92461 10.75736 9.77905 8.95105 8.24378 6.64178
Transcribed Image Text:m periods 12345 67890 10 NPBMHKD890 12345 257 1288 8780 2% .99039 1.94156 2.88388 11 PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 2% 3% 4% .97561 .97087 96154 1.92742 2.85602 1.91347 2.82861 3.80773 3.76197 3.71710 4.71346 4.64583 5.60143 5.50813 6.47199 6.34939 7.32548 7.17014 8.16224 7.97087 8.98259 8.75206 3.62990 4.57971 4.45182 |PVF-OA= 5% 6% 95238 94340 1.88609 1.85941 1.83339 2.77509 2.72325 2.67301 3.54595 3.46511 4.32948 4.21236 1 (1+i) 5.41719 524214 5.07569 4.91732 6.23028 6.00205 5.78637 5.58238 7.01969 6.73274 6.46321 6.20979 5.74664 7.78611 7.43533 7.10782 6.80169 6.24689 8.53020 8.11090 7.72173 7.36009 6.71008 14 9.78685 9.51421 9.25262 8.76048 8.30641 7.88687 7.13896 12 10.57534 10.25776 9.95400 9.38507 8.86325 8.38384 7.53608 13 11.34837 10.98319 10.63496 9.98565 9.39357 8.85268 7.90378 12.10625 11.69091 11.29607 10.56312 9.89864 9.29498 8.24424 15 12.84926 12.38138 11.93794 11.11839 10.37966 9.71225 8.55948 16 13.57771 13.05500 12.56110 11.65230 10.83777 10.10590 17 14.29187 13.71220 13.16612 12.16567 11.27407 10.47726 18 14.99203 14.35336 13.75351 12.65930 11.68959 10.82760 19 15.67846 14.97889 14.32380 13.13394 12 9632 11.15812 20 16.35143 15.58916 14.87747 13.59033 12.4 221 11.46992 8% 92593 1.78326 2.57710 3.31213 3.99271 17.87684 15.98277 18.32703 16.32959 18.76411 16.66306 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 5.53482 5.33493 5.14612 4.96764 4.48732 5.99525 5.75902 5.53705 5.32825 4.77158 6.41766 6.14457 5.88923 5.65022 5.01877 21.39541 20.00043 17.58849 15.59281 13.92909 21.84918 20.38877 17.87355 15.80268 14.08404 9% 10% 11% 12% 15% 91743 .90909 90090 89286 86957 1.75911 1.73554 1.71252 1.69005 1.62571 2.53130 2.48685 2.44371 240183 2.28323 3.23972 3.16986 3.10245 3.03735 2.85498 3.88965 3.79079 3.69590 3.60478 3.35216 15.41502 14.02916 12.82115 11.76408 10.01680 15.93692 14.45112 13.16800 12.04158 10.20074 16.44361 14.85684 13,48857 12.30338 10.37106 16.93554 15.24696 13.79864 12.55036 10.52876 17.41315 15.62208 14.09394 12.78336 10.67478 17.01121 16.18455 22 17.65805 16.76541 18.29220 17.33211 18.91393 17.88499 19.52346 18.42438 26 20.12104 18.95051 20.70690 19.46401 21.28127 19.96489 14.37519 13.00317 10.80998 9.92897 9.16095 8.48306 7.89566 6.49056 14.64303 13.21053 10.93516 10.02658 9.23722 8.45780 7.94255 6.51353 14.89813 13.40616 11.05108 10.11613 9.30657 8.60162 7.98442 6.53351 29 21.84438 20.45355 19.18845 16.98371 15,14107 13.59072 11.15841 10.19828 9.35961 8.65011 8.02181 6.55088 30 22.39646 20.93029 19.60044 17.29203 15.37245 13.76483 11.25778 10.27365 9.42691 8.69379 8.06518 6.56598 6.80519 6.49506 6.20652 5.93770 5.23371 7.16073 6.81369 6.49236 6.19437 5.42062 7.48690 7.10336 6.74987 6.42355 5.58315 7.78615 7.36669 6.98187 6.62817 5.72448 8.06069 7.60608 7.19087 6.81086 5.84737 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424 9.12164 8.54363 8.02155 7.54879 7.11963 6.04716 9.37189 8.75563 8.20141 7.70162 7.24967 6.12797 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 9.29224 8.64869 8.07507 7.56200 6.31 9.44243 8.77154 8.17574 7.64465 6.35866 9.58021 8.88322 8.26643 7.71843 6.39884 9.70661 8.98474 8.34814 7.78432 6.43377 9.82258 9.07704 8.42174 7.84314 6.46415 31 22.93770 11.34980 10.34280 9.47901 8.73315 8.08499 6.57911 32 23.46833 11.43500 10.40624 9.52638 8.76860 811159 6.59053 33 23.98856 22.29188 20.76579 18.14765 16.00255 14.23023 11.51389 10.46444 9.56943 8.80054 8.13535 6.60046 34 24.49859 22.72379 21.13184 18.41120 16.19290 14.36814 11.58693 10.51784 9.60858 8.82932 8.15656 6.60910 35 24.99862 23.14516 21.48722 18.66461 16.37419 14.49825 11.65457 10.56682 9.64416 8.85524 8.17550 6.61661 36 25.48884 23.55625 21.83225 18.90828 16.54685 14.62099 1171719 10.61176 9.67651 8.87859 8.19241 6.62314 37 25.96945 23.95732 22.16724 19.14258 16.71129 14.73678 11.77518 10.65299 9.70592 8.89963 8.20751 6.62682 38 26.44064 24.34850 22.49246 19.36786 15.86789 14.84602 11.82887 10.69082 9.73265 891859 8.22099 6.63375 39 26.90259 24.73034 22.80822 19.58448 17.01704 14.94907 11.87858 10.72552 9.75697 8.93567 823303 6.63805 40 27.35548 25.10278 23.11477 19.79277 17.15909 15.04630 11-92461 10.75736 9.77905 8.95105 8.24378 6.64178
You are the controller for Crane's Pizzeria Inc. (CPI). Crane is contemplating the purchase of a new commercial pizza oven in his popular Southern Ontario pizzeria and is asking for your assistance in making his decision. From the options presented by his creditor, he has narrowed down his options as follows: Option 1: Purchase the pizza oven with payments of $11,100 made semi-annually for 3 years. The interest rate on this arrangement is 8%. Option 2: Purchase the pizza oven with annual payments for 3 years of $23,200 at 9% interest. For each of the two option, using tables, a financial calculator or Excel function determine from a quantitative perspective, which of the two options should be pursued by Crane? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, eg. 5,275.25.) Click here to view Table A.4- PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Present value Crane should pursue Option 1 Option 2
Transcribed Image Text:You are the controller for Crane's Pizzeria Inc. (CPI). Crane is contemplating the purchase of a new commercial pizza oven in his popular Southern Ontario pizzeria and is asking for your assistance in making his decision. From the options presented by his creditor, he has narrowed down his options as follows: Option 1: Purchase the pizza oven with payments of $11,100 made semi-annually for 3 years. The interest rate on this arrangement is 8%. Option 2: Purchase the pizza oven with annual payments for 3 years of $23,200 at 9% interest. For each of the two option, using tables, a financial calculator or Excel function determine from a quantitative perspective, which of the two options should be pursued by Crane? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, eg. 5,275.25.) Click here to view Table A.4- PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Present value Crane should pursue Option 1 Option 2
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