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

question 89

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 of an annuity factor for 7 years at 9% is 5.0330. The present value of the equipment and loan is:

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

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Definitions:

Personality

A collection of traits that forms the unique character of an individual.

Anal Retentive

A term derived from Freudian psychoanalysis referring to an individual who is perceived to be overly orderly, rigid, and obsessive, often linked to the anal stage of psychosexual development.

Psychosexual Development

A Freudian theory that suggests children develop through a series of stages, each characterized by different demands for sexual gratification.

Tightwad Habits

Behavioral tendencies to spend less money than necessary, often to the extreme of foregoing expenditures that would improve quality of life.