Problem:
Shanghai Winters, one of BC's biggest customers, has requested a loan with favorable terms. Sheila and Ed decide to offer this customers a $70,000 five year note receivable. You recommend that since this is your best customer, they offer a 4% interest rate rather than the 7% going rate.
Using your knowledge of the time value of money, offer them guidance in each situation. Include the following in your answer:
What TVM concept (s) is represented in the situation?
What is the value of the money represented by the situation?
How did you arrive at the value?
I need calculations and a sound explanation.