Multiple Choice
ABC acquired equipment on January 1st, 2014 for $3,000 cash, plus a note which is payable in 5 annual instalments of $2,000 each beginning on 12/31/2014. If the market interest rate on similar notes is 10 percent (and is implicitly included in the annual instalments) the cost of the equipment (rounded to the nearest dollar) is:
A) $10,580.
B) $11,626.
C) $12,000.
D) $13,000.
Correct Answer:
Verified
Correct Answer:
Verified
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