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Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2021, to provide tires that cost Healdsburg $18 million to produce. The buyer offers Healdsburg $6 million in
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Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2021, to provide tires that cost Healdsburg $18 million to produce. The buyer offers Healdsburg $6 million in cash and agrees to take over only the principal payment on Healdsburg's 6.55% debt notes. Assume that the going market interest is 7% at the time. What would Healdsburg's gross profit be on the sale

User Xaxis
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Answer: hello your question is incomplete attached below is the complete question

answer : $9,836,000.

Step-by-step explanation:

Revenue of Healdsburg will be calculated as

= cash in hand + PV of the 6.55% note principal

= 6 million + ( 25million * 0.87344 ) = $27,836,000

hence Gross profit made by Healdsburg = 27,836,000 - 18,000,000 = $9,836,000.

given that ; n = 2 , interest ( i ) = 7%

Suppose that Healdsburg enters into a sales contract with an auto manufacturer on-example-1
Suppose that Healdsburg enters into a sales contract with an auto manufacturer on-example-2
Suppose that Healdsburg enters into a sales contract with an auto manufacturer on-example-3
User Paul Hodgson
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