Compute the Present Value of a 150-Day Non-Interest-Bearing Promissory Note

question 26

Essay

Compute the present value of a 150-day non-interest-bearing promissory note for $5000 dated June 15, if the note was sold on August 21 and money is worth 6.5%.

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Definitions:

Inventories

The complete list of items such as property, goods in stock, or the contents of a building, often held for sale in the regular course of a business.

Profit After Tax

The net income remaining after all taxes have been deducted from total revenue.

Unrealised Profit

Profit that has been made on paper through an investment but has not yet been cashed in by selling the asset.

Upstream

In a supply chain context, refers to processes or activities that occur at the beginning of the production process or closer to the raw materials stage.