A Company Borrows $10,000 and Issues a 5-Year, 6% Installment

question 124

True/False

A company borrows $10,000 and issues a 5-year, 6% installment note with interest payable annually. The factor for the present value of an annuity at 6% for 5 years is 4.2124. The factor for the present value of a single sum at 6% for 5 years is 0.7473. The amount of the annual payment is
$2,373.94.

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Definitions:

Referent Power

The ability to control another’s behavior because of the individual’s desire to identify with the power source.

Bathsheba Syndrome

Ethical failure amongst leaders, characterized by a sense of invulnerability that leads to poor personal decisions and misconduct.

Intoxicating

Having a substantial and often negative or overwhelming impact on mental or emotional state, typically related to substances but can also apply to experiences.

Corruptive

Referring to actions or behaviors that are dishonest, unethical, or designed to achieve an unfair advantage.