HomeworkFall2009Solutions 12,13,14

HomeworkFall2009Solutions 12,13,14 - HOMEWORK - Fall 2009...

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HOMEWORK - Fall 2009 – Chapters 1 through 7 ALL homework assignments must be completed by using some type of computer software program, e.g., word, excel. YOU WILL NOT RECEIVE FULL CREDIT FOR THE HOMEWORK UNLESS IT IS COMPLETED BY USING A COMPUTER. NO CREDIT WILL BE GIVEN FOR LATE HOMEWORK. When completing your homework assignments DO NOT use any abbreviations, e.g., spell out Governmental Accounting Standards Board instead of simply writing GASB. 12. (1 point) Assume that on 12-31-02 X Company entered into an agreement that required X to pay a supplier $5,000,000 on 12-31-05. Further assume that the appropriate market rate of interest for X was 8%. As of 12-31-02, what was the present value of X’s obligation? PV of a single, lump sum Using Table 6-2, n = 3 & i = 8%: $5,000,000 x 0.79383 = $3,969,150 Using calculator (immaterial difference) $3,969,161 13. (1 point) Assume that on 12-31-05 Y Company entered into an agreement that required Y to pay a supplier $100,000 every year until 2022. Y’s first payment of $100,000 was scheduled to take place on 12-31-06.
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This note was uploaded on 11/08/2010 for the course ACT ACT3391 taught by Professor R.turpin during the Fall '10 term at Troy.

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