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Present and future value tables of 1 at 11% are presented below. PV of $1 FV of $1 PVA of $1 FVA of $1 1
Present and future value tables of 1 at 11% are presented below.
PV of $1 | FV of $1 | PVA of $1 | FVA of $1 | |
1 | .90090 | 1.11000 | .90090 | 1.0000 |
2 | .81162 | 1.23210 | 1.71252 | 2.1100 |
3 | .73119 | 1.36763 | 2.44371 | 3.3421 |
4 | .65873 | 1.51807 | 3.10245 | 4.7097 |
5 | .59345 | 1.68506 | 3.69590 | 6.2278 |
6 | .53464 | 1.87041 | 4.23054 | 7.9129 |
Spielberg Inc. signed a $200,000 noninterest-bearing note due in five years from a production company eager to do business. Comparable borrowings have carried an 11% interest rate. What is the value of this debt at its inception?
$200,000.
$178,000.
$118,690.
$222,000.
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