Murphy Inc. has two new liabilities. The first liability is due in one year and has a face value of $1,500,000 and present value

Question

3 years ago

10

Murphy Inc. has two new liabilities. The first liability is due in one year and has a face value of $1,500,000 and present value

of $1,388,889. The second liability is due in three years and has a face value of $6,000,000 and a present value of 4,507,889. What is the increase in liabilities section of Murphy Inc.’s balance sheet due to these two new liabilities?

Business

1 answer:

Tanzania [10] · Answer 1 · 2022-06-14T17:09:49+03:00

Answer:

$5,896,778

Explanation:

The computation of the increase value in the liabilities section is shown below:

= Present value of the first liability due in one year + Present value of the second liability due in three years

= $1,388,889 + $4,507,889

= $5,896,778

For computing the increase value in the liabilities we simply added the present value of two liabilities given in the question