Assume that the Rap Snacks company has a loan agreement that provides it with cash today and the company must pay $25,000 one year from today, $15,000 two years from today and $5,000 three years from today. Rap Snacks agrees to pay 10% interest. The following factors are from the present value of $1 table:
$$\begin{array} { | c | c | }
\hline \text { Periods } & \text { Interest rate } 10 \% \
\hline 1 & 0.9091 \
\hline 2 & 0.8264 \
\hline 3 & 0.7513 \
\hline
\end{array}$$
What is the amount of cash that Rap Snacks receives today?

Question

Assume that the Rap Snacks company has a loan agreement that provides it with cash today and the company must pay $25,000 one year from today, $15,000 two years from today and $5,000 three years from today. Rap Snacks agrees to pay 10% interest. The following factors are from the present value of $1 table:
$$\begin{array} { | c | c | } 
\hline \text { Periods } & \text { Interest rate } 10 \% \
\hline 1 & 0.9091 \
\hline 2 & 0.8264 \
\hline 3 & 0.7513 \
\hline
\end{array}$$
What is the amount of cash that Rap Snacks receives today?

Quizplus · Accepted Answer

The Answer of Assume that the Rap Snacks company has a loan agreement that provides it with cash today and the company must pay $25,000 one year from today, $15,000 two years from today and $5,000 three years from today. Rap Snacks agrees to pay 10% interest. The following factors are from the present value of $1 table:
$$\begin{array} { | c | c | } 
\hline \text { Periods } & \text { Interest rate } 10 \% \
\hline 1 & 0.9091 \
\hline 2 & 0.8264 \
\hline 3 & 0.7513 \
\hline
\end{array}$$
What is the amount of cash that Rap Snacks receives today?

Assume That the Rap Snacks Company Has a Loan Agreement