Reference no: EM132660645

Epsilon Corporation purchased a building by agreeing to all three of the following terms:

(i) paying $90,000 cash on the purchase date of January 1, 2019,

(ii) paying $50,000 per year at the end of the year from 2019 to 2028, and

(iii) one additional payment of $50,000 ten years from the purchase date.

Problem 1: Epsilon's relevant borrowing rate is 10%. The value of the building reported on the balance sheet as of the purchase date is closest to:

A) $326,500
B) $460,000
C) $287,950
D) $416,500