Klein Company issues a four-year note in exchange for a license agreement with fair value of $100,000. The contract requires pay
ment of $27,956 at the beginning of each of the four years. The approximate effective interest rate associated with the notes payable is:_____. a. 10%.
b. 8%.
c. 6%.
d. 7%.
net income = total revenues - total expenses = $772,000 - $666,000 = $106,000
Any additional capital raised will increase the company's cash flows (financing activity) and any dividends distributed will decrease them (another financing activity), but they do not affect the company's net income.
