Question
A Toyota dealership owed a manufacturer $18000 on a date 4 months ago and another $12000 on a date 2 months from now. The Toyota
A Toyota dealership owed a manufacturer $18000 on a date 4 months ago and another $12000 on a date 2 months from now. The Toyota dealership is proposing to pay $17000 today and the balance in 11 months, when it will receive payment on a major sale to the provincial government. The manufacturer requires 10% simple interest on overdue accounts.
- What is the value of the first scheduled (and missed) payment 11 months from now?
- What is the value of the second scheduled payment 11 months from now?
- What is the total amount owing 11 months from now?
- What is the value of the proposed repayment today 11 months from now?
- What is the final proposed repayment owed to the manufacturer 11 months from now?
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
7th edition
978-1118344262, 111834426X, 1118162285, 978-1118562208, 1118562208, 978-1118162286
