Fouch Corporation wants to borrow $ 80,000 and use a noninterest- bearing note with a five- year

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Fouch Corporation wants to borrow $ 80,000 and use a noninterest- bearing note with a five- year life. If the market interest rate is 8 percent and the interest is compounded semiannually, what is the face value of the note? How much interest expense will Fouch Corporation show on its budgeted income statement for the first year of the note’s life? Describe the cash inflows and outflows Fouch must plan for with this note.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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