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Branson Inc. has sold product to the Brandywine Company, a major customer, for $33,000. As a courtesy to Brandywine, Branson has agreed to take a
Branson Inc. has sold product to the Brandywine Company, a major customer, for $33,000. As a courtesy to Brandywine, Branson has agreed to take a note due in two years for half of the amount due.
- What is the effective price of the transaction to Branson if the interest rate is:
- 6%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. $ fill in the blank 1
- 8%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. $ fill in the blank 2
- 10%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. $ fill in the blank 3
- 12%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. $ fill in the blank 4
- Under what conditions might the effective price be even less as viewed by Brandywine? If Brandywine's rate is
higherlowerhigher
than Branson's, it will perceive a greater discount.
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