Question
Ruffin Dog Supplies issued a $60,000, four-year note payable to Dozier Resources in exchange for cash. The note was issued at 8%, but notes with
Ruffin Dog Supplies issued a $60,000, four-year note payable to Dozier Resources in exchange for cash. The note was issued at 8%, but notes with similar risk have an interest rate of 6 percent. Ruffin is expected to make four annual interest payments of $4,800 with one lump-sum payment for the principal at the end of Year 4. How much cash will Ruffin receive on the date the note was issued?
Assume that the PVF-OA4, 6% = 3.46511, PVF-OA4, 8% = 3.31213, PVF4, 6% = 0.79209, and PVF4, 8% = 0.73503.
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Government and Not for Profit Accounting Concepts and Practices
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
7th edition
1118983270, 978-1119175025, 111917502X, 978-1119175001, 978-1118983270
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