Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for...

Question

Question

Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for...

Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for the note was 14%, if XYZ has to make equal payments at the end of each quarter for three years (quarterly discounting), Then the payment each time should be $827.87. True or False

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

FV =12006
Number of Periods =3*4 =12
Rate per quarter =14%/4 =3.5%
The Payment per quarter =FV/(((1+r)^n-1)/r)=12006/(((1+3.5%)^4-1)/3.5%)=2848.44

Hence the statement is false.

Add a comment

Answer 2

Similar Homework Help Questions

Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual...

Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for the note was 14% discounted semi-annually. Then the note price should be $10,000. True or False
Stellar Corporation purchased equipment and in exchange signed a two-year promissory note. The note requires Stellar...

Stellar Corporation purchased equipment and in exchange signed a two-year promissory note. The note requires Stellar to make a single payment of $100,000 in two years. Stellar has other promissory notes that charge interest at the annual rate of 5 percent. Part of Legendary Corporation purchased equipment and in exchange signed a three-year promissory note. The note requires Legendary to make equal annual payments of $10,000 at the end of each of the next three years. Legendary has other promissory...
11) Today, Thomas deposited $100,000 in a three-year. 12% CD that compounds quarterly What is the maturity value of the...

11) Today, Thomas deposited $100,000 in a three-year. 12% CD that compounds quarterly What is the maturity value of the CD? A) $109,270. B) $119,410. C) $309,090. D) $142,576. 12) Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $50,000 five years from now. How much must Carol deposit to accomplish her goal? A) $43.131. B) $35.000. C) $37,205. D) $35,069. 13) At the end of...

XYZ Corporation has just issued a callable (at Par) three year 7% coupon with semi-annual coupon...

XYZ Corporation has just issued a callable (at Par) three year 7% coupon with semi-annual coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $98. What is the bond's yield to maturity and yield call? a. The yield to maturity is B. what is the yield to call
1. Determine the discount rate assuming the present value of $940 at the end of 1-year...

1. Determine the discount rate assuming the present value of $940 at the end of 1-year is $865? 2. $9,800 is deposited for 12 years at 5% compounded annually, determine the FV? 3. If $2,800 is discounted back 4 years at an interest rate of 8% compounded semi-annually, what would be the present value? 4. Consider a newlywed who is planning a wedding anniversary gift of a trip to Canada for her husband at the end of 10 years. She...
Vator 10 puntos) agreement for equipment. Annual payments are 1, 2017, XYZ Company signed an 8-year...

Vator 10 puntos) agreement for equipment. Annual payments are 1, 2017, XYZ Company signed an 8-year lease 1 2017 XYZ Company signed an of equipment. Annual payments are $28 500 to be made at the beginning of year. At the end of the lease the inment will revert to the lessor. The equipment has a useful life of 8 years and has no sul life of 8 years and has no residual value. At the time of the lease agreement...

help Pharoah Company has purchased equipment that requires annual payments of $85000 to be paid at...

help Pharoah Company has purchased equipment that requires annual payments of $85000 to be paid at the end of each of the next 5 years. The appropriate discount rate is 6%. What amount will be used to record the equipment? • $425000 O $358051 $410772 $360650
ABC purchased equipment at a cost of $ 45,000. To finance the purchase, he signed a...

ABC purchased equipment at a cost of $ 45,000. To finance the purchase, he signed a five-year promissory note, which requires five equal annual payments. ABC will make the first payment in one year. Each payment will be in the amount of $ 12,795. Suppose the note carries an interest rate of 12% and ABC will pay $ 10,000 annually for the five years of the note. At the end of year 5, in addition to the $ 10,000, ABC...
Question 8 O out of 0.5 points Pope Industries purchased a machine from Fitz Corporation on...

Question 8 O out of 0.5 points Pope Industries purchased a machine from Fitz Corporation on October 1, 2016. In payment for the $211,000 purchase, Pope issued a two year installment note to be paid in equal quarterly payments at the end of X each quarter. The payments include interest at an annual rate of 129. Each installment payment will be 5 Question 9 O out of 0.5 points

A company purchased equipment and signed a 4-year installment loan at 6% annual interest. The annual...

A company purchased equipment and signed a 4-year installment loan at 6% annual interest. The annual payments equal $11,200. The present value for an annuity (series of payments) at 6% for 4 years is 3.4651. The present value of 1 (single sum) for 4 years at 6% is 7921. The present value of the loan is: Multiple Choice $11,200. $8,872. $14,140 $44.800 $38,809

Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for...

Homework Answers

Add Answer to:
Company XYZ purchased equipment and gave a three-year note with maturity value of $12,006. The annual discount rate for...

Post as a guest

Earn Coins