Business, 03.08.2019 02:10 shelbybibb99

Acompany must repay the bank a single payment of $20,000 cash in 3 years for a loan it entered into. the loan is at 8% interest compounded annually. the present value factor for 3 years at 8% is 0.7938. the present value of an annuity factor for 3 years at 8% is 2.5771. the present value of the loan:

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Answer from: kaylienguyen

Present value of the loan = $15,877

Explanation:

One thing that one must master with this type of question is how to choose between a present value factor and a present value annuity factor. If the solution to a question calls for discounting a single payment or a set of payments with different amounts, then one should use present value factors. If the question calls for discounting an annuity, which is a series of equal payments at equal intervals, then one should use a present value annuity factor.

In this question, the company must repay a single payment of $20,000 in 3 years. to find the present value we discount this payment that is to made at the end of year 3 by multiplying with the present value factor for 3 years at 8% is 0.7938 i.e

PV=$20,000*0.7938 = $15,877

Alternatively one can use a tabular format to visualise what is happening as follows:

YearCash-flowPV factor at 8%Present value

1 - 0.9259 $0.00

2 - 0.8573 $0.00

3 $20,000 0.7938 $15,876.64

Present Value $15,876.64

Answer from: Quest

answer; post closing trial balance;

Answer from: Quest

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- up to life in prison or an unlimited fine (or both) for a class a drug- up to 14 years in prison or an unlimited fine (or both) for a class b or class c drug."sorry if this was a school question, you didnt supply options so i assumed it was a personal question, which if it is, reconsider selling or having possesion of any drugs at all. i wish you the best!

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Acompany must repay the bank a single payment of $20,000 cash in 3 years for a loan it entered into....

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