Smith Company has purchased a new office building. The company has agreed to pay

ID: 2461427 • Letter: S

Question

Smith Company has purchased a new office building. The company has agreed to pay the developer $55,000 annually for 9 years. (Use Table 2)

Using present value techniques, determine the value that should be recorded for the building when it is purchased. Assume a 6 percent annual interest rate. (Round "PV Factors" to 4 decimal places and final answer to the nearest whole dollar amount. Omit the "$" sign in your response.)

Smith Company has purchased a new office building. The company has agreed to pay the developer $55,000 annually for 9 years. (Use Table 2)

Explanation / Answer

Using presen value technique value to be recorded should be

= 55000 x PVAF@6% for 9years

= 55000 x 6.8017

= $374094

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Smith Company has purchased a new office building. The company has agreed to pay

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Explanation / Answer

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