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# Acct 550 Week 4 Homework Assignment

• Date Submitted: 08/26/2016 01:03 AM
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ACCT 550 Week 4 Homework Assignment

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ACCT 550 Week 4 Homework Assignment

E6-5 (Computation of Present Value) Using the appropriate interest table, compute the present values
of the following periodic amounts due at the end of the designated periods.
(a) \$30,000 receivable at the end of each period for 8 periods compounded at 12%.
This is a case of annuity because the person is receiving the amount at the end of each period.
E6-12 (Analysis of Alternatives) The Black Knights Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Black Knights has decided to locate a new factory in the Panama City area. Black Knights will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three buildings. Building A: Purchase for a cash price of \$600,000, useful life 25 years. Building B: Lease for 25 years with annual lease payments of \$69,000 being made at the beginning of the year. Building C: Purchase for \$650,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of \$7,000. Rental payments will be received at the end of each year. The Black Knights Inc. has no aversion to being a landlord. Instructions In which building would you recommend that The Black Knights Inc. locate, assuming a 12% cost of funds?
E7-5 (Recording Sales Gross and Net) On June 3, Arnold Company sold to Chester Company merchandise having a sale price of \$3,000 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling \$90, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company....