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On January 2, 2009Dennisson Inc. purchased a piece of machinery and signed a noninterest bearing note in its payment. The Note requires the Company to
On January 2, 2009Dennisson Inc. purchased a piece of machinery and signed a noninterest bearing note in its payment. The Note requires the Company to pay $100,000 on December 31,2011. Dennisson is not sure what interest rate appropriately reflects the time value of money. However, the price lists indicate the machine could have been purchased for a price of $79,383.
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What is the effective interest rate implicit in the transaction/ Show computation.
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