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Question
Assume that a company has a loan agreement that provides it with cash today and that the company must pay $25,000 one year from today, $15,000 two years from today, and $5,000 three years from today. The company agrees to pay 10% interest. The following factors are from the present value of $1 table:
|
Periods |
Interest rate 10% |
|
1 |
0.9091 |
|
2 |
0.8264 |
|
3 |
0.7513 |
What is the amount of cash the company receives today?
Answer
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Related questions
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Q:
Periods
12 Percent 1
8929 2
1.6901 3
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Q:
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A. Total cost times markup percentage.
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Q:
Capital budgeting decisions are generally based on:
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B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
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E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.