A Company Purchased Equipment and Signed a Seven-Year Installment Loan

question 63

Multiple Choice

A company purchased equipment and signed a seven-year installment loan at 9% annual interest.The annual payments equal $9,000.The present value factor for an annuity for seven years at 9% is 5.0330.What value for this equipment should be recorded on the company's books on the day the contract is signed?

• A)$9,000
• B)$5,033
• C)$63,000
• D)$57,330
• E)$45,297

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Definitions:

Logistic Regression Model

A statistical method used for analyzing a dataset in which there are one or more independent variables that determine an outcome. The outcome is measured with a dichotomous variable (where there are only two possible outcomes).

Indicator Variable

A variable, usually binary, used to represent the presence or absence of a categorical effect in regression models.

Groceries

Consumer goods, especially food and household items, sold by a grocer.

Log Odds

The logarithm of the odds ratio, used in logistic regression to describe the relationship between a binary dependent variable and one or more independent variables.