Start-up computer software development firm

Assignment Help Financial Management

Reference no: EM131957926

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 5,000 shares of Microsoft stock. Lanni sells the shares of stock for $25 per share and uses part of the proceeds to pay off the bank loan.

Reference no: EM131957926

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