Answer
Cost of the special tractor = 44,838.20
Work Step by Step
PV–OA = R (PVF–OAn,i)
PV–OA = 5,000 x (PVF–OA8, 12%)
PV–OA = 5,000 x (4.96764)
PV–OA = 24,838.20
Cost of the special tractor = 20,000 + 24,838.20 = 44,838.20
Intermediate Accounting 14th Edition
by Kieso, Donald E.; Weygandt, Jerry J.; Warfield, Terry D.
Published by
Wiley
ISBN 10:
0470587237
ISBN 13:
978-0-47058-723-2
Chapter 6 - Accounting and the Time Value of Money - Problems - Page 347: P6-1d
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