Russell Company Has Acquired a Building with a Loan That $\bold{\text{(Use appropriate factor(s)from the tables provided.)}}$

question 47

Multiple Choice

Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building? (PV of $1,FV of $1,PVA of $1,and FVA of $1) $\bold{\text{(Use appropriate factor(s) from the tables provided.) }}$

• A)$72,096
• B)$113,004
• C)$147,202
• D)$86,590
• E)$200,000

---

Definitions:

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Free Cash Flow

The cash that a business produces after deducting cash outflows needed for operational activities and the upkeep of its fixed assets.

Cash Dividends

Distributions of earnings paid to shareholders in the form of cash.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.