EAlgo Computing Four Present Value Problems LO
On January of this year, Skamania Company completed the following transactions assume a annual interest rate: FV of $ PV
of $ FVA of $ and PVA of $
Note: Use the appropriate factors from the tables provided.
a Bought a delivery truck and agreed to pay $ at the end of three years.
b Rented an office building and was given the option of paying $ at the end of each of the next three years or paying
$ immediately.
c Established a savings account by depositing a single amount that will increase to $ at the end of seven years.
d Decided to deposit a single sum in the bank that will provide equal annual yearend payments of $ to a retired
employee payments starting December of this year
Required:
a What is the cost of the truck that should be recorded at the time of purchase?
b Which option for the office building results in the lowest present value?
c What single amount must be deposited in this account on January of this year?
d What single sum must be deposited in the bank on January of this year?
