Bosworth Corporation Accepted a 5-Year Note Receivable from Steelman Company

Bosworth Corporation accepted a 5-year note receivable from Steelman Company on January 1, Year 1. The maturity value of the note is $800,000. The note has a stated interest rate of 10%. However, the prevailing market interest rate is 12%. The note requires interest payments on June 30 and December 31. What is the present value of this note at inception

A) $741,119
B) $446,716
C) $800,000
D) $1,035,523

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free