Mcclelland company agreed to purchase some landscaping, Ask an Expert

Finance

McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash price of $500,000. Before accepting delivery of the equipment, McClelland learned that the same equipment could be purchased from another dealer for $460,000. To avoid losing the sale, Agri-Products have offered McClelland a "no interest" payment plan-McClelland would pay $100,000 at delivery, $200,000 one year later, and the final $200,000 in two years.

Required

1. McClelland would usually pay annual interest of 9% on a loan of this type. What is the present value of the Agri-Products loan at the delivery date?

2. What journal entry would McClelland make if it accepts the deal and buys from Agri-Products?

3. What should McClelland do?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9284051

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What is inventory and why is it important for your business

What is inventory and why is it important for your business, investors or potential lenders?

Banking and finance research project -this project will

Banking and Finance Research Project - This project will further your understanding of how financial markets function. The assignment consists of two parts. Part A of the assignment focuses on the financial instruments o ...

1 assume that company a wants to take-over company b

1) Assume that Company A wants to take-over Company B. Determine the enterprise Value of company B? Can Company A afford to buy Company B? Additional information Company A stock price 6.80 AED per share in 2017 and 6.90 ...

The seaboard shipping company has a warehouse terminal in

The Seaboard Shipping Company has a warehouse terminal in Spartanburg, South Carolina. The capacity of each terminal dock is 3 trucks. As trucks enter the terminal, the drivers receive numbers, and when one of the three ...

You place a commercial building into service on feb 1st

You place a commercial building into service on Feb 1st, 2017 costing $42,300,000. What is the depreciation expense allowed by the IRS for this building for tax years 2017? and 2018?

What is the difference between systematic versus

What is the difference between systematic versus unsystematic risk?

When restating nonmonetary asset accounts the price index

When restating nonmonetary asset accounts, the price index at the current date represents the price index from which the conversion is made, and the price index at the time of acquisition represents the index to which th ...

1 consider an investment which has the following cash

1. Consider an investment which has the following cash flows: Year Cash flow ($) 0 (31,000) 1 10,000 2 20,000 3 10,000 4 10,000 5 5,000 Compute the: (a) payback period; (b) NPV at 14 percent cost of capital; and (c) IRR. ...

What is the present value of a security that will pay 9000

What is the present value of a security that will pay $9,000 in 20 years if securities of equal risk pay 12% annually? Round your answer to the nearest cent

Gardial amp son has an roa of 12 a 5 profit margin and a

Gardial & Son has an ROA of 12%, a 5% profit margin, and a return on equity equal to 20%. What is the company's total assets turnover? What is the firm's equity multiplier?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert