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Lux Company issues a 10% (annual = 5% semi-annual), 5-year mortgage note on January 1, 2017,...

Lux Company issues a 10% (annual = 5% semi-annual), 5-year mortgage note on January 1, 2017, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual (5 yrs x 2 ea = 10 periods) installment payments of $48,850. What are the cash proceeds received from the issuance of the note

Lux Company should receive _____________from the issuance of the note.

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Answer #1
Lux Company should receive $377206.51 from the issuance of note
Workings:
Year Value Flows Present Factor @ 5% Present Value
Installment Payment 1 - 10 $        48,850 7.72173 $   3,77,206.51
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