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Alternate Exercises and Problems 6–1
Chapter 6 Time Value of Money Concepts
EXERCISES
Exercise 6-1
1. FV = $50,000 x 2.15892* = $107,946
Exercise 6-2
1. PV = $20,000 x .46319* = $9,264
* Present value of $1: n=10, i=8% (from Table 2)
6–2 Intermediate Accounting, 8/e
Exercise 6-3
1. PV = $50,000 x .46319* = $23,160
* Present value of $1: n=10, i=8% (from Table 2)
Exercise 6-4
1. PVA = $10,000 x 3.79079* = $37,908
* Present value of an ordinary annuity of $1: n=5, i=10% (from Table 4)
Alternate Exercises and Problems 6–3
Exercise 6-5
1. PVA = $5,000 x 6.14457* = $30,723
* Present value of an ordinary annuity of $1: n=10, i=10% (from Table 4)
Exercise 6-6
PV = ? x .80426* = $4,800
PVA = ? x 14.99203* = $5,968
annuity amount
6–4 Intermediate Accounting, 8/e
PROBLEMS
Problem 6-1
2. $600,000 = Annuity amount x 4.24646*
3. Choose the option with the lowest present value of cash outflows.
1. Buy option:
2. Lease option:
Alternate Exercises and Problems 6–5
Problem 6-2
Choose the alternative with the highest present value.
Alternative 1:
Alternative 2:
Alternative 3:
