Alden Trucking Company Is Replacing Part of Its Fleet of Trucks

question 87

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. What is the amount of the 2017 interest expense?

• A)$3,169,880.
• B)$3,290,800.
• C)$4,000,000.
• D)$2,790,800.

---

Definitions:

Estimated Flow Rate

An approximated speed at which a fluid is moved through a medium, relevant in medical, chemical, and environmental contexts.

DA Equations

Short for Drug Amount equations, these are mathematical formulas used to calculate the precise amount of a medication required for a patient, based on various clinical factors.

Gravity Device

A tool or apparatus designed to utilize the force of gravity for various purposes, often medical or scientific.

DF10 Administration Set

A medical device used for the administration of fluids and medications via infusion, designed with a specific flow rate.