Jenks Company Financed the Purchase of a Machine by Making

question 92

Multiple Choice

Jenks Company financed the purchase of a machine by making payments of £24,000 at the end of each of five years. The appropriate rate of interest was 8%. The future value of one for five periods at 8% is 1.46933. The future value of an ordinary annuity for five periods at 8% is 5.8666. The present value of an ordinary annuity for five periods at 8% is 3.99271. What was the cost of the machine to Jenks?

• A) £35,264
• B) £95,825
• C) £120,000
• D) £140,800

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Definitions:

Public Easement

A legal right granted to the public to use a specific parcel of land for a designated purpose, such as a pathway or utility line.

Fee Owner

The individual or entity that holds full ownership rights of a property, including the ability to use, sell, or lease it.

Soil

The top layer of the earth's surface, composed of organic matter, minerals, gases, liquids, and organisms, supporting plant life.

Easement Appurtenant

A right attached to a specific piece of land (the dominant estate) that allows the landowner to use the neighboring land (the servient estate) for a particular purpose.