Alden Trucking Company Is Replacing Part of Its Fleet of Trucks

question 28

Multiple Choice

Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2016. Alden financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2016 and continuing for a total of four more years (final payment December 31, 2020) . Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually. The amount of principal that is paid at December 31, 2016 is:

• A)$32,908,000.
• B)$31,698,800.
• C)$40,000,000.
• D)$27,908,000.

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Definitions:

Error Sum

The total difference between observed values and the values predicted by a model or hypothesis.

Degrees Of Freedom

Degrees of freedom typically refer to the number of independent values or quantities that can vary in an analysis without violating any constraints.

Treatment

In medical and scientific studies, the specific procedure or set of procedures administered to participants.

Error

A mistake in calculation, measurement, or observation that may lead to incorrect conclusions or results.