# Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of $5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of$1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of $1 at 15% for 5 periods is 6.74. The present value of$1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. $12,500 b.$16,750 c. $25,000 d.$33,700

### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

#### Solutions

Chapter
Section
Chapter 10, Problem 3MC
Textbook Problem

## Expert Solution

### Want to see the full answer?

Check out a sample textbook solution.See solution

### Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.