3a) The company issues a note to an entity to borrow cash for five years and will pay $500,000 to the entity at the end of the fifth year but not pay any interest. If the annual market interest rate is 4%, please calculate the present value of the note (compounded annually and rounded to the nearest dollar). 3b) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the five years, please calculate the present value of the note (rounded to the nearest dollar). 3c) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the last four years (the second to fifth years), please calculate the present value of the note (rounded to the nearest dollar).

3a) The company issues a note to an entity to borrow cash for five years and will pay $500,000 to the entity at the end of the fifth year but not pay any interest. If the annual market interest rate is 4%, please calculate the present value of the note (compounded annually and rounded to the nearest dollar). 3b) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the five years, please calculate the present value of the note (rounded to the nearest dollar). 3c) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the last four years (the second to fifth years), please calculate the present value of the note (rounded to the nearest dollar).

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

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