The Strug Company purchased office furniture and equipment for $8,600 and agreed to pay for the purchase by making five annual installment payments beginning one year from today. The installment payments include interest at 8%. What is the required annual installment payment? (Use the appropriate table in the text.)a. $1,720b. $2,154c. $1,994d. $1,466

The correct answer is B. $2,154

Explanation:

Provided data from the question

Present value of office equipment and furniture purchased = $8,600

Number of installments agreed = 5

Interest rate on installment payments = 8%

To determine the required annual installment payment, solve:

Present value = Annual payments × Present value of annuity factor at 8% and number of installment (5)

Present value of annuity factor = 1-(1+r)⁻ⁿ / r

where r = interest rate and n = number of installment agreed

Present value of annuity factor =  1-(1+0.08)⁻⁵ / 0.08

Present value of annuity factor =  3.99271

Therefore,

$8600 = Annual installment payment × 3.99271

= $8,600/3.99271

Annual installment payment = $2,154

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer(b); ; ; the quantitative or qualitative variable for which the experimenter wishes to determine how its value is affected by the explanatory variable;