On january 1, 2016, cobb co. received, for the sale of a parcel of land, a ten-year note receivable having a face amount of $2,000,000 and a stated interest rate of 8% payable annually each december 31. the market rate of interest for this type of note is 10%. present value factors are as follows: at 8% at 10% present value of 1 for 10 periods 0.46319 0.38554 present value of an ordinary annuity of 1 for 10 periods 6.71008 6.14457 the amount to record as proceeds for the sale of the land is: a) $2,000,000 b) $1,960,200 c) $1,840,000 d) $1,754,211 e) none of the above

d) $1,754,211

Explanation:

The computation of the proceeds for the sale of the land is shown below:

= Interest expense × PVIFA for 10 years at 10% + Face value × PVIF for 10 years at 10%

= $160,000 × 6.14457 + $2,000,000 × 0.38554

= $983,131.20 + $771,080

= $1,754,211

The interest expense would be

= $2,000,000 × 8%

= $160,000

Simply we multiply the interest expense and face value with its present value interest annuity factor and present value interest factor so that the accurate amount can come.

b. It clarifies the problem, the process and the customer of the process prior to data collection

Explanation:

DMAIC is an acronym for various phases in carrying out projects and they are Define, Measure, Analyze, Improve, Control.

The Define phase is widely known as the primary phase of DMAIC which is characterized by the project agreement, customer demands and requirements, and process operation strategy.

Hence, the importance of the Define Phase in terms of its placement in the DMAIC method is that " it clarifies the problem, the process and the customer of the process prior to data collection"