Alan Burnie Has Just Started Work and Has Been Wanting

question 10

Multiple Choice

Alan Burnie has just started work and has been wanting to buy a sleek powerboat for sometime. Rather than purchase and finance now, he plans to save every three months and increase the deposits by 3% per annum as he expects raises at least that large. How much must the first deposit be if the boat costs $25,000 today and he expects to earn 10% on the money over the next five years?

• A) $1,501.56
• B) $2,081.99
• C) $1,561.49
• D) $6,097.27
• E) $2,359.82

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Definitions:

Goodwill

The value attributed to a company's brand name, customer relationships, employee relations, and other intangible assets during an acquisition, over and above the tangible assets' value.

Voting Common Stock

Equity securities that give shareholders the right to vote on corporate matters.

Fair Value

The compensation for parting with an asset or the financial burden of settling a liability in an orderly market operation as of the measurement checkpoint.