A company must repay the bank $10,000 cash in 3 years for a loan it entered into.
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Question:
A company must repay the bank $10,000 cash in 3 years for a loan it entered into. The loan is at 8% interest compounded annually. The present value factor for 3 years at 8% is 0.7938. The present value of the loan is:
A. $10,000
B. $12,400
C. $ 7,938
D. $ 9,200
E. $ 7,600
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