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Cirrus Inc

Question 3

Multiple Choice

Cirrus Inc.purchased certain plant assets under a deferred payment contract.The agreement was to pay $40,000 per year for ten years.The plant assets should be valued at


A) $400,000.
B) $400,000 plus imputed interest.
C) present value of $40,000 annuity for ten years at an imputed interest rate.
D) future value of $40,000 annuity for ten years at an imputed interest rate.

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