On July 7, 2014, Lawrence Company Sold Some Machinery to Johnson

question 137

Multiple Choice

On July 7, 2014, Lawrence Company sold some machinery to Johnson Construction Company. The sales contract requires Johnson to pay five equal annual payments of $75,000 each, beginning on July 7, 2014. What present value concept is most 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 value of an annuity of $1 for five periods
• D) future value of $1 for five periods

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Definitions:

Bo Dietl

A former New York City Police Department detective and media personality known for his work in law enforcement and security consulting.

Deductive Reasoning

A method of reasoning from the general to the specific, where conclusions follow logically from premises.

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Specialized skill or knowledge in conducting detailed and systematic examinations or inquiries.

Sound

A logical argument that is both valid and based on accurate premises.