Little Construction Ltd $$\begin{array} { l r } \text { Land } & \$ 200,000 \\\text { Building } & 300,000 \\\text { Equipment } & 150,000\end{array}$$

question 4

Short Answer

Little Construction Ltd. bought land, a building, and equipment for a lump-sum of $600,000. Following are the appraised fair market values of the newly acquired assets: $$\begin{array} { l r } \text { Land } & \$ 200,000 \\\text { Building } & 300,000 \\\text { Equipment } & 150,000\end{array}$$ Determine the cost of each asset. Round to the nearest dollar if necessary. Land $\quad\quad ------$
Building $\quad\quad -----$
Equipment $\quad\quad -----$

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Definitions:

Present Value

The present-day worth of money expected in the future or series of cash flows, calculated using a fixed rate of return.

Compounded Monthly

The process where interest is added to the principal amount each month, and future interest is earned on the increased balance.

Effective Annual Rate

The interest rate on an investment or loan that accounts for the effect of compounding over a one-year period.

Retirement Supplement

Additional income or benefits provided to individuals upon retirement, often as part of pensions or savings plans.