What is the present value of this note

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Question

On January 1, 2018, Desert Co. sold goods to Jungle Company. In exchange, Jungle signed a zero-interest-bearing note requiring payment of $200,000 each year for seven years. The first payment is not due until December 31, 2018. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows:

# Periods PV of 1 at 10% PV of Ordinary Annuity at 10% 6 0.5645 4.3553 7 0.5132 4.8684

What is the present value of this note?

Reference no: EM132385806

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