Kersey Manufacturing Co A Small Fabricator Of Plastics Needs To Purchase An Extrusio 2371556

Kersey Manufacturing Co., a small fabricator of plastics, needs to purchase an extrusion molding
machine for $120,000. Kersey will borrow money from a bank at an interest rate of 9% over five
years. Kersey expects its product sales to be slow during the first year, but to increase subsequently
at an annual rate of 10%. Kersey therefore arranges with the bank to pay off the loan on a “balloon
scale,” which results in the lowest payment at the end of the first year and each subsequent payment
being just 10% over the previous one. Determine the five annual payments