Cooper Company Has Purchased Equipment That Requires Annual Payments of $18,000

question 11

Multiple Choice

Cooper Company has purchased equipment that requires annual payments of $18,000 to be paid at the end of each of the next 6 years.The discount rate is 8%.The present value of $1 for six periods at 8% is 0.630.The present value of an ordinary annuity of $1 for six periods at 8% is 4.623.What amount will be assigned to the equipment at the purchase date? (Round your final answer to the nearest dollar. )

• A)$3,894
• B)$83,214
• C)$94,554
• D)$11,340

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Definitions:

Price

The amount of money required to purchase a good or service, often determined by supply and demand in the market.

Demand

The quantity of a product or service that consumers are willing and able to buy at a given price over a specified period of time.

Price

The expenditure needed to secure a product, service, or piece of property.

Price-discriminating Monopolist

A monopolist that sells the same product at different prices to different groups of consumers, usually to maximize profits by capturing consumer surplus.