Joseph Halabi is a financial executive with Carla Vista Enterprises. Although Joseph has not had any formal training in finance or accounting, he has a good sense for numbers and has helped the company grow from a very small company $($$$450,000$ in sales$)$ to a large operation $($$$40\mathrm{.}50$ million in sales$).$ With the business growing steadily, however, the company needs to make a number of difficult financial decisions in which Joseph feels a little over his head. He therefore has decided to hire a new employee with numbers expertise to help him. As a basis for determining whom to employ, he has decided to ask each prospective employee to prepare answers to questions relating to situations he has encountered recently.

The following are the facts for the second question asked of prospective employees.

Last year the company exchanged a piece of land for a non$$interest$$bearing note. The note is to be paid at the rate of $$14,400$ per year for nine years, beginning one year from the date of disposal of the land. An appropriate rate of interest for the note was $11\%($market rate$).$ At the time the land was originally purchased, it cost $$86,400.$

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

$($a$)$

Your answer is incorrect.

Calculate the fair value of the note using IFRS $13$ on the date of the exchange. Hint: discount the payments at the market rate of interest to find the present value of the note. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answer to $2$ decimal places, e$.$g$.5,275\mathrm{.}25.)$

Fair value of the note under IFRS $13$ $enter the fair value of the note using international financial reporting standard $13$ in dollars rounded to $2$ decimal places