SOSKE Company finished consultation services and accepted in exchange a promissory note with a face value of P200,000, a due date of December 31, 2020, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%.   The following interest factors are provided:                             Interest Rate Table Factors for Three Period                                                                             5%                              10% Future value of 1                      1.15763                                  1.33100 Present value of 1                   0.86384                                  0.75132 Future value of ordinary        3.15250                                   3.31000 annuity of 1    Present value of ordinary     2.72325                                  2.48685 annuity of 1   What is the present value of the note?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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SOSKE Company finished consultation services and accepted in exchange a promissory note with a face value of P200,000, a due date of December 31, 2020, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%.

 

The following interest factors are provided:

                            Interest Rate Table Factors for Three Period                                                                             5%                              10%

Future value of 1                      1.15763                                  1.33100

Present value of 1                   0.86384                                  0.75132

Future value of ordinary        3.15250                                   3.31000

annuity of 1   

Present value of ordinary     2.72325                                  2.48685

annuity of 1

 

What is the present value of the note?

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