Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)
4th Edition
ISBN: 9780134417356
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Question
Chapter B, Problem 3SE
1.
To determine
Calculate the present value cost of each payment plan.
2.
To determine
Discuss the factors that must be considered by Incorporation H while deciding to purchase the equipment.
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Question
MTR bank has agreed to provide a lockbox system to Sexy Inc. for a fixed fee of P50, 000 per year and a rate of P.50 for each payment processed by the bank. On average, Sexy Inc. receives 50 payments per day, each averaging P20,000. With the lockbox system, the company’s collection float will decrease by two days. The annual interest rate on money market securities is 6%. If Sexy Inc. makes use of the lockbox system, what would be the net benefit to the company? Use 365 days in a year.
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Charlie Corp. is purchasing new equipment with a cash cost of $100,000 for the assembly line. The manufacturer has offered to accept $22,960 payments at the end of each of the next six years. What is the interest rate that Charlie Corp. will be paying? a. 8%. b. 9%. c. 10%. d. 11%.
Chapter B Solutions
Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)
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