Diamond,Inc

question 1

Multiple Choice

Diamond,Inc.purchased a machine under a deferred payment contract on December 31,2013.Under the terms of the contract,Diamond is required to make eight annual payments of $140,000 each beginning December 31,2014.The appropriate interest rate is 8 percent.The purchase price of the machine is

• A) $1,389,190.
• B) $1,120,000.
• C) $868,900.
• D) $804,530.