Question
BPM Recording Studios holds a 200-day simple interest note from one of the DJs that agreed to pay them to record an album. The 12%
BPM Recording Studios holds a 200-day simple interest note from one of the DJs that agreed to pay them to record an album. The 12% simple interest note has a face value of $48,000.
A. First, calculate the maturity value for this note. Round to the nearest penny.
BPM wishes to convert their note to cash, so they sell it to Lakeside Collections on Day 120. Lakeside isnt familiar with electronic music and requires a high discount rate of 12.5% to take over the loan.
B.How much money will Lakeside Collections pay to take over the loan? In other words, what are the proceeds to BPM studios from the sale of the note?
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Financial Accounting An Introduction To Concepts Methods And Uses
Authors: Clyde P. Stickney, Roman L. Weil
12th Edition
0324381980, 978-0324381986
