Multiple Choice
Spielberg Inc. signed a $200,000 noninterest-bearing note due in five years from a production company eager to do business. Comparable borrowings have carried an 11% interest rate. At what amount should this debt be valued at its inception?
A) $200,000.
B) $178,000.
C) $118,690.
D) $222,000.PV = $200,000 x .59345* = $118,690 *PV of $1: n=5; i=11%
Correct Answer:
Verified
Correct Answer:
Verified
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