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25 July, 01:05

Charlie Corp. is purchasing new equipment with a cash cost of $300,000 for an assembly line. The manufacturer has offered to accept $68,900 payment at the end of each of the next six years. How much interest will Charlie Corp. pay over the term of the loan

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Answers (2)
  1. 25 July, 01:29
    0
    The answer is D) 113 400

    Explanation:

    Interest are the amounts that exceed the capital repayment (the original $ 300 000 represents the capital repayment). By multiplying the annual payment by the number of years (6 x 68900) and subtracting the original capital amount of $300 000 we're left with $ 113 400. This represents the amount of interest expense over the period
  2. 25 July, 02:20
    0
    D. $113,400

    Explanation:

    Given that

    Cash cost = 300,000

    Installmental payments = $68900 each year for 6 years.

    Therefore

    Interest = total installment payment - cash cost

    = (68900 * 6) - 300,000

    = 413,400 - 300,000

    = $113,400.
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Home » Business » Charlie Corp. is purchasing new equipment with a cash cost of $300,000 for an assembly line. The manufacturer has offered to accept $68,900 payment at the end of each of the next six years. How much interest will Charlie Corp.
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