A Debt of $5000 Is Due Today and Another Debt

question 99

Multiple Choice

A debt of $5000 is due today and another debt of $4000 is due in 70 days.These debts are to be settled/replaced by a payment of $6000 in 20-days and a payment of $X in 110-days (from today) .If r = 11%,what is the value of X using the end of 20 days as the focal date?

• A)$2892.31
• B)$3008.81
• C)$3001.67
• D)$3051.34

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, entitling the shareholder to a proportion of the corporation's assets and profits.

Depreciation

The systematic allocation of the cost of an asset over its useful life.

Net Income

The total revenue of a company minus its expenses, taxes, and the cost of goods sold, indicating the company's profit.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.