A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a nuclear weapon. The company is in need of additional funding and issues a series of $1,000 face value bonds that pay a nominal annual rate of 6% with quarterly payments. The bond matures in 6 years.
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- A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a nuclear weapon. The company is in need of additional funding and issues a series of $1,000 face value bonds that pay a nominal annual rate of 6% with quarterly payments. The bond matures in 6 years. If you buy one bond for $820 and keep it until maturity, what is your effective annual rate of return? Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places.A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a nuclear weapon. The company is in need of additional funding and issues a series of $1,000 face value bonds that pay a nominal annual rate of 8% with quarterly payments. The bond matures in 6 years. Part a Your answer is correct. If you buy one bond for $905 and keep it until maturity, what is your effective annual rate of return? Click here to access the TVM Factor Table calculator. 10.52 % Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.02.A company is considering starting a new product line. The new product line requires the installation ofnew machines and equipment. For this purpose, company wants to borrow money by issuing bonds of$10,000 for 12-year period. The interest on these bonds is to be paid at a rate of 10% per year. Computethe amount of interest to be paid to bondholders over 12-year period:a) if the simple interest is charged. b) If the interest is compounded annually.
- The issuance of bonds by a public agency is often the manner by which projects are funded. The two major types of bonds are general obligation bonds and revenue bonds. If a $20 million bond is issued for 10% for 25 years. What annual payment needs to be generated by the bonding agency to fully meet the payoff obligations at the end of 25 years if the bank pays an interest rate of 5%?The company has made an investment in government bonds. The bonds will generate an interest income of OMR 17960 each year for 6 years. The interest rate is 12% annually. Compute present value of the stream of interest income for 6 years.Petron needs to raise $50,000 for capital expansion of its plant. The company issues ten year bonds to raise the money. The bonds are redeemable at 102. The rate of interest on the bond, r, is 3.43% payable quarterly. If at the time of the bond issue interest rates, i, are 2.31% compounded quarterly, what amount of money will the company received from the bond issue? *
- A client deposits 150,000 in a bank, with the bank agreeing to pay 6% annual effective for three years. The client indicates that one third of the account balance will be withdrawn at the end of the first year and half of the account balance will be withdrawn at the end of the second year. The bank can invest in either one year or three year zero coupon bonds. The one year bonds yield 7% and the three year bonds yield 10%. Develop an investment program based on immunization.Tri-States Gas Producers expects to borrow $800,000 for field engineering improvements. Two methods of debt financing are possible—borrow it all from a bank or issue debenture bonds. The company will pay an effective 8% per year to the bank for 8 years. The principal on the loan will be reduced uniformly over the 8 years, with the remainder of each annual payment going toward interest. The bond issue will be for 800 ten-year bonds of $1000 each that require a 6% per year dividend payment. (a) Which method of financing is cheaper after an effective tax rate of 40% is considered? (b) Which is the cheaper method using a before-tax analysis? Is it the same as the after-tax choice?A bond issued by the national government pays 1000 Php at the end of each year for 6 years, plus an additional 10,000 Php when the bond matures at the end of 6 years. What is the maximum payment for this bond if the existing opportunity cost of funds is 10%?
- Please do excel like you did last timeOn January 1, 2021, Water World issues $26 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world’s largest water avalanche and the “tornado”—a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. Required: 1. If the market rate is 6%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 2. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 3. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.To raise capital for an expansion project, Pegasus Motors Corporation issued P5000.00, 8% bonds. The bonds will mature in 15 years with interest paid every three months. If an investor purchased 12 certificates for P48, 000.00. Determine: a) the total quarterly receipts due; b) the current yield of the bond. (Ans. P1200.00; 10%)