Question: Fouch Corporation wants to borrow 80 000 and use a
Fouch Corporation wants to borrow $ 80,000 and use a noninterest- bearing note with a five- year life. If the market interest rate is 8 percent and the interest is compounded semiannually, what is the face value of the note? How much interest expense will Fouch Corporation show on its budgeted income statement for the first year of the note’s life? Describe the cash inflows and outflows Fouch must plan for with this note.
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