On July 7, 2010, Luke Company Sold Some Machinery to Jones

question 63

Multiple Choice

On July 7, 2010, Luke Company sold some machinery to Jones Construction Company.The sales contract requires Jones to pay five equal annual payments of $70, 000 each, beginning on July 7, 2010.What present value concept is appropriate for this situation?

• A)present value of an annuity due of $1 for five periods
• B)present value of an ordinary annuity of $1 for five periods
• C)future amount of an annuity of $1 for five periods
• D)future amount of $1 for five periods

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Definitions:

Holocene

The current geological epoch, which started approximately 11,700 years ago after the last major ice age.

Carbon Dating

A method used to determine the age of an artifact or remains by measuring the amount of carbon-14 present, which decays over time.

Radiometric Dating

A method for determining the age of an object based on the decay rate of radioactive isotopes contained within it.

Half-Life

The time required for half the quantity of a radioactive substance to undergo decay or for a drug's concentration in the body to be reduced by half.