Here are the attached files, I am not sure which one you need. The Jenkins Corpo

Question

Here are the attached files, I am not sure which one you need.

The Jenkins Corporation has purchased an executive jet. The company has agreed to pay $260,000 per year for the next 10 years and an additional $1,460,000 at the end of the 10th year. The seller of the jet is charging 5 percent interest. Determine the liability that would be recorded by Jenkins. (FV of $1, PV of 1, FVA of $1, and PVA of S1) (Use the appropriate factor(s) from the tables provided.) ent interest. Determine the li Present value

Explanation / Answer

Solution.

Calculation of Present value of outflow

Amount 2,903,910 would be reported by Jenkins.

Year Amount P.V factor P.V of Outflow 1       260,000          0.9524            247,624 2       260,000          0.9070            235,820 3       260,000          0.8638            224,588 4       260,000          0.8227            213,902 5       260,000          0.7835            203,710 6       260,000          0.7462            194,012 7       260,000          0.7107            184,782 8       260,000          0.6768            175,968 9       260,000          0.6446            167,596 10       260,000          0.6139            159,614 10 1460000          0.6139            896,294 Total    4,060,000         2,903,910

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