Company is to make an annual principal payment of P600,000 for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The required payments were made by Stay Company for 2019 and 2020. However, during 2020, Stay Company began to face financial difficulties, requiring Almost Inc. to reevaluate the collectability of the loan. On December 31, 2020, Almost Inc. determines that it will be able to collect the remaining principal, but it is unlikely that the interest will be collected. The following present value factors are taken from the table of present values: PV of 1 at 8% for: 1 period 2 periods 3 periods 0.92593 0.85734 0.79383 What is the present value of the expected future cash flows as of December 31, 2020? 1,800,000
Company is to make an annual principal payment of P600,000 for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The required payments were made by Stay Company for 2019 and 2020. However, during 2020, Stay Company began to face financial difficulties, requiring Almost Inc. to reevaluate the collectability of the loan. On December 31, 2020, Almost Inc. determines that it will be able to collect the remaining principal, but it is unlikely that the interest will be collected. The following present value factors are taken from the table of present values: PV of 1 at 8% for: 1 period 2 periods 3 periods 0.92593 0.85734 0.79383 What is the present value of the expected future cash flows as of December 31, 2020? 1,800,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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