The equipment has a price of 103000 the manufacturer has

Assignment Help Accounting Basics

Reference no: EM13482188

Exercise 6-11

Amos Excavating Inc. is purchasing a bulldozer. The equipment has a price of $103,000. The manufacturer has offered a payment plan that would allow Amos to make 12 equal annual payments of $16,628, with the first payment due one year after the purchase.

(a) How much total interest will Amos pay on this payment plan? (Round answers to 0 decimal places, e.g. $458,581.)

Total interest

(b) Amos could borrow $103,000 from its bank to finance the purchase at an annual rate of 11%. Should Amos borrow from the bank or use the manufacturer's payment plan to pay for the equipment?

Derek Lee just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 11%, compounded annually.

(a) If Lee plans to establish the DL Foundation once the fund grows to $3,151,760, how many years until he can establish the foundation?

years

(b) Instead of investing the entire $1,000,000, Lee invests $300,000 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be if Lee plans to establish the $3,151,760 foundation at the end of 9 years?

Reference no: EM13482188

Questions Cloud

What is the doubtful accounts expense for 2008 how will the : georgia company reported accounts receivable of 16.5 million at the end of its 2007 fiscal year. this amount was net of

Each of the four independent situations above describes a : situation123 nbspnbsp4nbspnbsplease term years444 nbspnbsp4nbspnbspassets useful life years656 nbspnbsp6nbspnbspassets

Would your answer be different in b if the productive : schopp inc. has been manufacturing its own shades for its table lamps. the company is currently operating at 100 of

On january 1 2013 sweetwater furniture company leased : on january 1 2013 sweetwater furniture company leased office space under a 21-year operating lease agreement. the

The equipment has a price of 103000 the manufacturer has : exercise 6-11amos excavating inc. is purchasing a bulldozer. the equipment has a price of 103000. the manufacturer has

One company purchases all of the outstanding shares of : one company purchases all of the outstanding shares of another company. the acquiring company incurs the following

What is the level of accounts receivable needed tosupport : collins office supplies is considering a more liberal credit policy to increase sales but expects that 9 percent of the

Based on historical data from other franchise stores and a : steven farrow is considering opening a franchise liquor store next to a new retail shopping center based on historical

Plummet corporation reported the book value of its net : plummet corporation reported the book value of its net assets at 400000 when zenith corporation acquired 100 percent

User Account

All Pages