Hi could you please complete all parts? Otto Co. borrows money on April 30, 2016

Question

Hi could you please complete all parts?

Otto Co. borrows money on April 30, 2016, by promising to make four payments of $12,000 each on November 1, 2016, May 1, 2017; November 1, 2017; and May 1, 2018. (PV of $1. EV of $1. PVA of $1 and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) 1. How much money is Otto able to borrow if the interest rate is 6%, compounded semiannually? Periodic Cash Flow Table FactorPresent Value How much money is Otto able to borrow if the interest rate is 10%, compounded semiannually? Periodic Cash Flow Table Factor Present Value

Explanation / Answer

Requirement 1 Periodic Cash flows Table Factor Present Value 12000 3.7171 44605.18 Year Table factor@3% April 30, 2016 1 November 1, 2016 0.9709 May 1, 2017 0.9426 November 1, 2017 0.9151 May 1, 2018 0.8885 Total 3.7171 Requirement 2 Periodic Cash flows Table Factor Present Value 12000 3.5460 42551.41 Year Table factor@5% April 30, 2016 1 November 1, 2016 0.9524 May 1, 2017 0.9070 November 1, 2017 0.8638 May 1, 2018 0.8227 Total 3.5460 Requirement 3 Periodic Cash flows Table Factor Present Value 12000 3.4651 41581.27 Year Table factor@6% April 30, 2016 1 November 1, 2016 0.9434 May 1, 2017 0.8900 November 1, 2017 0.8396 May 1, 2018 0.7921 Total 3.4651

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