A company borrowed cash from the bank and signed a 6-year note at 7% annual interest. The present value for an annuity (series of payments) at 7% for 6 years is 4.7665. The present value of 1 (single sum) at 7% for 6 years is 0.6663. Each annual payment equals $8,400. The present value of the note is:
A. $26,652.00.
B. $40,038.60.
C. $190,660.00.
D. $40,540.00.
E. $5,596.92.
Answer: B
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