Answer
The receivable’s fair value would decrease should there be an increase in the interest rates.
To elaborate, if the interest rates increase to 10%, which means it will be a rate of 5% for six months, the present value of the ordinary annuity will be equivalent to
50,000 x 12.46221=$623,110.5
Work Step by Step
The receivable’s fair value would decrease should there be an increase in the interest rates.
To elaborate, if the interest rates increase to 10%, which means it will be a rate of 5% for six months, the present value of the ordinary annuity will be equivalent to
50,000 x 12.46221=$623,110.5
