A Company Purchased Equipment and Signed a 7-Year Installment Loan

question 54

Multiple Choice

A company purchased equipment and signed a 7-year installment loan at 9% annual interest.The annual payments equal $9,000.The present value factor for an annuity for 7 years at 9% is 5.0330.The present value of the loan is:

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

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Definitions:

Panel

A group of individuals selected to discuss, investigate, or make decisions about a particular topic, or a longitudinal statistical study in which the same subjects are observed repeatedly over a period of time.

Long-Run Equilibrium

A state in which all factors of production and outputs are variable, leading to a situation where no economic agent has the incentive to alter their behavior.

Economic Profit

The difference between total revenues and the total costs of a firm, including both explicit and implicit costs.

Gas Station

A retail business establishment that sells fuel and engine lubricants for motor vehicles.