Bosworth Corporation Accepted a 5-Year Note Receivable from Steelman Company

question 125

Multiple Choice

Bosworth Corporation accepted a 5-year note receivable from Steelman Company on January 1, Year 1. The maturity value of the note is $800,000. The note has a stated interest rate of 10%. However, the prevailing market interest rate is 12%. The note requires interest payments on June 30 and December 31. What is the present value of this note at inception

• A) $741,119
• B) $446,716
• C) $800,000
• D) $1,035,523

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Definitions:

Projective Testing

A psychological assessment technique where subjects interpret ambiguous stimuli, revealing hidden emotions, desires, and conflicts.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing behaviors, cognitions, and emotional patterns.

Aptitude Inventories

Standardized tests designed to measure an individual's potential to succeed in a certain skill or field of study.

Predicted

Stated or estimated about the future based on current evidence or trends; forecasted.