I have a friend, and he wants to lend an amount of ₱250,000 today. Then he wanted to pay it back in twenty annual installments of ₱30,000 starting three years from today and he said, I can earn 8% of it. Will I accept his request under these terms?

I have a friend, and he wants to lend an amount of ₱250,000 today. Then he wanted to pay it back in twenty annual installments of ₱30,000 starting three years from today and he said, I can earn 8% of it. Will I accept his request under these terms?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Deffered Annuity

Show solution and cash flow.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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