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Doing the time value of money calculations

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Braxton Technologies, Inc., constructed a conveyor for A&G Warehouses that was completed and ready for use on January 1, 2013. A&G paid for the conveyor by issuing a $100,000, four-year note that specified 5% interest to be paid on December 31 of each year, and the note is to be repaid at the end of four years. The conveyor was custom-built for A&G, so its cash price was unknown. By comparison with similar transactions it was determined that a reasonable interest rate was 10%. Note: Use Excel functions when doing the time value of money calculations in this problem.

Reference no: EM13670991

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