Question: Klein Company issues a four-year note in exchange for a license agreement with fair value of $100,000. The contract requires payment of $27,956 at the

Klein Company issues a four-year note in exchange for a license agreement with fair value of $100,000. The contract requires payment of $27,956 at the beginning of each of the four years. The approximate effective interest rate associated with the notes payable is:

Multiple Choice

  • 10%.

  • 8%.

  • 6%.

  • 7%.

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