Below you will find a series of independent questions involving present value concepts. Show all factors used in present value computations and indicate the table that was used (FV of $1, PV of $1, etc). If you use a financial calculator, show the key strokes you used to compute the answer: N, i/y, PV, FV and PMT
1.) Sacks Corporation bought a new machine and agreed to pay for it in 5 equal installments of $40,000 at the end of each of the next 5 years. Assuming that the prevailing rate of 6% applies to this contract, how much should Sacks record as the cost of the machine?
b. Design amortization schedules showing the payments under the assumption:
1. Interest is included in the face amount of the note.
2. The note is an interest bearing note.
c. Prepare the entry to record the purchase of the machine and the first payment under each of the 2 assumptions in b. This answer requires four entries!