1-A) On January 1, 2013, Strong Industries borrowed $100,000 for six years. Stro
ID: 2478615 • Letter: 1
Question
1-A) On January 1, 2013, Strong Industries borrowed $100,000 for six years. Strong signed a noninterest-bearing note. Assuming that the market rate of interest is 7 percent on the date the note is made and that interest is compounded annually. What is the face value of the note?
A) $100,000
b) $150,070
c) $207,345
D) $356,942
B) Refer to Question 1. What is the amount of interest expense shown on the budgeted income statement for 2013?
A) $6,500
B) $7,000
C) $7,490
D) $8,120
C) Refer to A and B. Describe the cash inflows and outflows Strong must plan for with this note
B) Refer to Question 1. What is the amount of interest expense shown on the budgeted income statement for 2013?
A) $6,500
B) $7,000
C) $7,490
D) $8,120
C) Refer to A and B. Describe the cash inflows and outflows Strong must plan for with this note
Explanation / Answer
Answer:1-A) A) $100,000
Answer:B) B) $7000
=100000*7%=$7000
Answer:C) Cash inflow=100000
Cash outfloew=$7000
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