A Corporation sold an issue of 20-year bonds, having a total face value of 20,000,000 for 8, 500,000 The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.
A Corporation sold an issue of 20-year bonds, having a total face value of 20,000,000 for 8, 500,000 The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5EA: Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The...
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Subject: Engineering economics
A Corporation sold an issue of 20-year bonds, having a total face value of 20,000,000 for 8, 500,000 The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.
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