Question

CALCULATOR PRINTER VERSION BACK Brief Exercise G-16 Crane Company receives a $76,300, 6-year note bearing interest of 4% (paid annually) from a customer at a time when the discount rate is 9%. Click here to view the faster tables Click here to view the factor table 2 Click here to view the factor table 3 Click here to view the factor table 4. What is the present value of the note received by Crane? (For calculation purposes, use 5 decimal places as displayed in the factor to 2 decimal places, g. 25.25.) 5.24571. Round ans Present value of not received

Answer 1

Note Valuation
Note face value	76,300
Note Interest rate	4%
Market Interest rate(discount rate)	9%
Tenure	6 Years
Interest Payment	Annually
Table value based on
n(time)	6
i(rate)	9%
Cash Flow	Table Value	Amount	Present value
Par (maturity value)	0.5963	76,300	45,498
Interest (annuity)	4.486	3,052	13,691
Present Value of Note			59,189
**interest amount =76,300*4% =3052