Libby_7e_MBA_Companion_Solutions

04 12 60 0 future value 120000 excel output pv

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Unformatted text preview: Future Value -120,000 EXCEL OUTPUT PV 98,280.37 LO 6 S ME-4 Computing the present value of a future retirement obligation Costco Corporation has agreed to pay employees who have worked for the company more than 10 years a retirement bonus of $20,000 upon retirement. Rick Jamison has worked for Costco for 15 years. Costco estimates that Rick will retire in 7 years. If interest accrues quarterly and Costco can earn an annual return on deposits of 3 percent, how much would Costco have to deposit today in order to have exactly $20,000 to pay Rick at the end of 7 years? ANSWER EXCEL INPUTS Rate Periods Payment 0.03 / 4 28 0 Future Value -20,000 EXCEL OUTPUT PV 16,224.39 Page 3 of 21 END-OF-CHAPTER MATERIAL LO 1 EXERCISES S E-1 Recording rent expense Amazon Corporation signed a 5-year operating lease to rent a distribution center on January 1. Rent payments of $10,000 are due at the end of each month. Prepare the journal entry to record the payment of cash for rent on January 31. ANSWER Rent expense (...
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This homework help was uploaded on 03/27/2014 for the course ACCOUNTING 151 taught by Professor Chinn during the Spring '12 term at Lehigh University .

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