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Homework answers / question archive / Sunland Company will receive $397000 in 7 years
Sunland Company will receive $397000 in 7 years. If the appropriate interest rate is 10%, the present value of the $397000 receipt is
| $773642. |
| $599470. |
| $202470. |
| $203725. |
The correct answer is
$ 203725
Calculation
Present Value of Receipts = Value of note / Present
= 397000/(1+10%)^7
= 397000/1.948717
= $ 203725
