A Bank loaned B Company P7,500,000 on January 1, 2020. The terms of the loan were payment in full on January 1, 2025, plus annual interest payment at 12%. The interest payment was made as scheduled on January 1, 2021. However, due to financial setbacks, Sundial was unable to make its 2022 interest payment. A Bank considers the loan impaired and projects the cash flows from the loan as of December 31, 2022. Assume that the bank accrued the interest at December 31, 2021 but did not continue to accrue interest in 2022 due to the impairment of the loan. The projected cash flows are shown in the picture.

The projected cash flows are Date of cash flow Amount projected as of December 31, 2022 December 31, 2023 500,000 December 31, 2024 1,000,000 December 31, 2025 2,000,000 December 31, 2026 4,000,000 The present value of 1 at 12% is as follows: For one period 0.89 For two periods 0.80 For three periods 0.71 For four periods 0.64