A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year. The term is for 5 months. The rate of interest is 6.75%. What is the maturity value of the note? Select one: A. $5334.20 B. $5234.30 C. $5342.30 D. $5324.30 E. $5444.30

A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year. The term is for 5 months. The rate of interest is 6.75%. What is the maturity value of the note? Select one: A. $5334.20 B. $5234.30 C. $5342.30 D. $5324.30 E. $5444.30

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...

See similar textbooks

Related questions

Q: Based on the table below, what is the expected return of the stock? Probability 0.20 0.10 0.40 0.20…

A: The expected return of the stock refers to the profit that the stock provides on average to the…

Q: If the one-year spot rate is 7 percent and the two-year spot rate is 8.5 per- cent, what is the…

A: One-year forward rate over the second year is (1+two year spot rate)^2/(1+one year spot rate) -1

Q: A zero-coupon bond has a $1,000 par value, 7 years to maturity, and sells for $554.63. What is its…

A: Yield to maturity:Yield to maturity (YTM) is a financial term that refers to the total return an…

Q: Que Corporation pays a regular dividend of $1 per share. Typically, the stock price drops by $0.80…

A: When the company receives profits and distributes them among the shareholders. That share of profit…

Q: Dave's Demolitions Inc. is considering purchasing $697,400 of equipment for a four- year project.…

A: Salvage Value net of tax refers to the sale value of the he equipment or the project after the…

Q: You will earn money each year off your tax-deferred retirement accounts without having to pay taxes…

A: The money and resources that a person or family receives during their retirement years are referred…

Q: Problem 6-18 Project NPV Imperial Motors is considering producing its popular Rooster model in…

A: Initial cost=CNY5.9 billionSalvage value=CNY519 millionUnits produced in 1st year= 200,000Units…

Q: ABC Company and XYZ Company are identical firms in all respects except for their capital structure.…

A: Equity $ 5,75,000.00 $ 2,87,500.00Debt $ - $ 2,87,500.00EBIT $ 64,000.00 $…

Q: You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your…

A: Present value is the value of loan or future periodic payments at the present date.

Q: O The market price of a semi-annual pay bond is $971.90. It has 14.00 years to maturity and a coupon…

A: Bonds are debt instruments issued by companies. The company that issues a bond pays period interest…

Q: Arco Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon,…

A: Yield to call refers to the rate of return anticipated by an investor when a bond or other…

Q: CASE STUDY Cucumber Ltd is a company, based in Manchester UK and established in 2005, that produces…

A: Businesses implement capital budgeting procedures, which are financial processes and instruments, to…

Q: Frostbite thermalwear has a zero coupon bond issue outstanding with a face value of 18,000 that…

A: A popular mathematical method in finance for pricing European-style options is the Black-Scholes…

Q: Laurel Enterprises pays annual dividends, and the next dividend is expected to be in one year.…

A: Earning per share= $3.52Retention ratio= 40%Cost of capital= 9%Return on new investment=9%

Q: A church congregation has raised $37,625 for future outreach work. If the money is invested in a…

A: Future value = P x (1+i )n Where P= Principle Amount Invested i= Interest…

Q: Gateway Communications is considering a project with an initial fixed assets cost of $1.47 million…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: A firm has EBIT of $30 million. It has debt of $100 million and the cost of debt is 7%. Its…

A: The value of unlevered firm can be calculated by using equation below.Unlevered firm value…

Q: On Monday 6 March, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement…

A: Dirty price of bond is the sum of clean price of bond and accrued interest on the date of…

Q: A company paid $27,800 plus a broker's fee of $275 to acquire 8% bonds with a $30,000 maturity…

A: According to bartleby guidelines , if multiple questions are asked , then 1st question needs to be…

Q: Uncle BJ bought 100 shares of Apple at $95 per share, with an initial margin of 60%. He was charged…

A: The concept of holding period is an important concept of finance as it deals with the total return…

Q: We Pay Insurance Company will pay you $1,575 each quarter for 25 years. You want to earn a minimum…

A: The concept of time value of money will be used here. This concept states that worth of money…

Q: Based on Exhibit 7-7, what would be the monthly mortgage payments for each of the following…

A: A mortgage is a type of loan provided by a financial institution or lender to individuals or…

Q: The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a…

A: Here, MCSEMonthRate of Returns1-0.020.0920.05-0.033-0.08-0.1140.120.175-0.02-0.0460.030.02

Q: P10–24 ALL TECHNIQUES, CONFLICTING RANKINGS Nicholson Roofing Materials Inc. is considering two…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: Globalisation is the process by which businesses or other organizations develop international…

A: Globalization is a complex and multifaceted process that involves businesses and organizations…

Q: Pandora media plans to issue original issue discount bonds with a 20 year maturity $1000 par value…

A: Bond price will be equal to sum of present value of all coupon payments and present value of face…

Q: An investor buys a 6% annual payment bond with three years to maturity. The Dond has a…

A: Duration of bond is weighted period required to recover the all cash flow from the bond and it shows…

Q: 26) Your portfolio is comprised of the following stocks: $125.500 in stock Bross with a beta 2.8;…

A: The beta of a portfolio refers to the measure of the systematic risk that a portfolio faces and is…

Q: Milton Industries expects free cash flows of $19 million each year. Milton's corporate tax rate is…

A: Given:ParticularsAmountFree cash flows$19MillionTax rate22%Unlevered cost of capital…

Q: Determine the net present value of for the project

A: Net Present Value (NPV) is a capital budgeting technique that helps in evaluating various capital…

Q: You note the following yield curve in The Wall Street Journal According to the unbiased expectations…

A: The forward rate refers to the rate at which the transaction is to be held at some future date,…

Q: ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of…

A: Here,Constant Growth Rate (g) is 8%Last Dividend Paid (D0) is $2.8Required Rate of Return (r) is 12%

Q: A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and…

A: The process of evaluating a stock's intrinsic or fair value involves weighing a number of variables,…

Q: In 2022, the California Air Resources Board (CARB) started planning its “Phase 3” requirements for…

A: Investment cost( PV) = $500 millionCost of capital (r)= 10%Number of years(n)= 22 years

Q: Company's tax rate is 28% . a) What is the pre-tax cost of capital for Company A? b) What is the…

A: The weighted average cost of capital measures the typical cost a business pays to finance its…

Q: Mathew has purchased an investment for $6,805.83.. He will receive $10,000 5 years from today. What…

A: For calculating IRR we will consider the current value and initial investment amount to compute the…

Q: The yield on a 1-year bill in the U. K. is 7% and the present exchange rate is 1 pound = U. S.…

A: Variables in the question:1-year bill in the U. K. = 7%Present exchange rate is 1 pound = U. S.…

Q: If $1,000 is invested in an account that pays 3% interest compounded annually, the total amount A(t)…

A: Future value is a financial concept that refers to the value of an investment or asset at a specific…

Q: You want to buy a $234,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: Mortgage refers to a covered loan that is borrowed for purchasing a property. The property itself…

Q: If the firm uses money market hedge, one year from now, their accounts receivables will fetch them:…

A: The relative worth of two currencies, or the amount of one currency that may be exchanged for one…

Q: Consider the following: Year Cash Flow 0 -$8,000 1 $200 2 $400 3 ? 4 $500 $700 LO 5 The required…

A: We do capital budgeting to determine whether a project under consideration is financially feasible…

Q: Richard just entered a university, and his parents are planning to give him a car upon graduation.…

A: Future value is computed by following formula:-FV = A*(1+r)nwhereFV = future valueA = amount…

Q: Suppose we observe the following rates: 1R₁ = 0.80%, 1R₂ = 1.25%, and E(271) = 0.941%. If the…

A: Variables in the question: 1R1=0.80% =0.0081R2=1.25% =0.0125E(2r1)=0.941% =0.00941

Q: Use the unpaid balance method to find the finance charge on the credit card account for April. The…

A: Finance charge refers to the type of cost used to incur through the borrowing of the funds. It…

Q: Assume the spot Swiss franc is $0.7015 and the six-month forward rate is $0.6980. What is the Value…

A: Spot Swiss Franc = $ 0.7015Six months Forward rate =Six months Forward rate = $ 0.6980nbsp;…

Q: Weismann Company issued 14-year bonds a year ago at a coupon rate of 10 percent. The bonds make…

A: Solution:-Bond price means the price at which a bond should trade in the market. It is the summation…

Q: One-year Treasury bills currently earn 2.10 percent. You expect that one year from now, 1-year…

A: The expectations theory refers to the relationship between the long-term spot rate and the…

Q: If Boeing decides to use a money market hedge, what is the USD amount it would receive in 1 year…

A: A money market hedge is a financial strategy used by businesses and investors to protect themselves…

Q: Ribelin Corporation is adding a new product line that will require an investment of $218,000. The…

A: Payback period is the period required to recover initial investment of the project that is going on.

Q: Erica purchases a retirement annuity that will pay her $1,500 at the end of every six months for the…

A: Purchase price of annuity would be the present value of payments received from annuity based on time…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year. The
term is for 5 months. The rate of interest is 6.75%. What is the maturity value of the note?
Select one:
A.
$5334.20
B.
$5234.30
C.
$5342.30
D.
$5324.30
E.
$5444.30

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Brief description

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On January 1 a company issues a $75,000 bond that pays interest semi-annually. The first interest payment of $1,875 is paid on July 1. What is the stated annual interest rate on the bond? A. 5.00% B. 2.50% C. 1.25% D. 10.00%
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Entries for installment note transactions On January 1, 20Y2, Hebron Company issued a 175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of 43,830, beginning on December 31, 20Y2. Journalize the entries to record the following: