On January 1, 2019, Ott Co. sold goods to Flynn Company. Flynn signed a zero-interest-bearing note requiring payment of €100,000 annually for seven years. The first payment was made on January 1, 2019. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows:

Question

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The present value of the note is €486,840, which is calculated as follows:PV = €100,000 x (1 - 1/(1.10^7)) / 0.10 = €486,840