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Jenks Company financed the purchase of a machine by paying $37,000 a year for the next five years, with the first payment dueWhich of the following is false? O A. If the first payment is received at the end of the fifth period, it means the ordinary

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Answer #1

Solution 1:

Purchase cost of machine = $37,000 * Cumulative PV factor at 7% for 5 periods

= $37,000 * 4.10020 = $151,707

Solution 2:

The false statement is "The future value of a deferred annuity is equal to the future value of an annuity not deferred" because future value of a deferred annuity is lower than future value of an annuity not deferred.

Hence option C is correct.

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