Question
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a four-year, noninterest-baring note in the face
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a four-year, noninterest-baring note in the face amount of $8 million. The note is payable in four annual installments of $2 million at the end of each year.
1.) What is the effective rate of interest implicit in the agreement?
Do NOT Refer to PV factor table.
Solve by using Financial Calculator.
The answer is 12% but I need help getting there.
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Survey of Accounting
Authors: Edmonds, old, Mcnair, Tsay
2nd edition
9780077392659, 978-0-07-73417, 77392655, 0-07-734177-5, 73379557, 978-0073379555
