On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for...

 

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On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Promised to pay a fixed amount of $6,700 at the end of each year for nine years and a one-time payment of $116,400 at the end of the 9th year. b. Established a plant remodeling fund of $491,050 to be available at the end of Year 10. A single sum that will grow to $491,050 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,700 at the end of the first year, $113,200 at the end of the second year, and $150,700 at the end of the third year. d. Purchased a $173,500 machine on January 1 of this year for $34,700 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (c), determine the present value of this obligation. (Round your answer to nearest whole dollar.) Present value On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Promised to pay a fixed amount of $6,700 at the end of each year for nine years and a one-time payment of $116,400 at the end of the 9th year. b. Established a plant remodeling fund of $491,050 to be available at the end of Year 10. A single sum that will grow to $491,050 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,700 at the end of the first year, $113,200 at the end of the second year, and $150,700 at the end of the third year. d. Purchased a $173,500 machine on January 1 of this year for $34,700 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (c), determine the present value of this obligation. (Round your answer to nearest whole dollar.) Present value

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Answer Transaction c Present Value of Severance Package Obligation We need to calculate the present ... View the full answer