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.)
1. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of $115,000 at the end of the 7th year.
2. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to $490,000 will be deposited on January 1 of this year.
3. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112,500 at the end of the second year, and $150,000 at the end of the third year.
4. Purchased a $170,000 machine on January 1 of this year for $34,000 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.
In transactlon (3), determine the present value of this obligation.
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On January 1, Boston Company completed the following transactions (use a 7% annual Interest rate for...
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