Downing Company issues $5,000,000, 6%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue? 2.5% 3.0% 5.0% 6.0% Present value of a single sum for 5 periods .88385 .86261 .78353 .74726 Present value of a single sum for 10 periods .78120 .74409 .61391 .55839 Present value of an annuity for 5 periods 4.64583 4.57971 4.32948 4.21236 Present value of an annuity for 10 periods 8.75206 8.53020 7.72
Downing Company issues $5,000,000, 6%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue? 2.5% 3.0% 5.0% 6.0% Present value of a single sum for 5 periods .88385 .86261 .78353 .74726 Present value of a single sum for 10 periods .78120 .74409 .61391 .55839 Present value of an annuity for 5 periods 4.64583 4.57971 4.32948 4.21236 Present value of an annuity for 10 periods 8.75206 8.53020 7.72
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Downing Company issues $5,000,000, 6%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue?
| 2.5% | 3.0% | 5.0% | 6.0% |
Present value of a single sum for 5 periods | .88385 | .86261 | .78353 | .74726 |
Present value of a single sum for 10 periods | .78120 | .74409 | .61391 | .55839 |
Present value of an annuity for 5 periods | 4.64583 | 4.57971 | 4.32948 | 4.21236 |
Present value of an annuity for 10 periods | 8.75206 | 8.53020 | 7.72173 | 7.36009 |
a. $5,000,000
b. $5,218,809
c. $5,217,309
d. $5,216,494
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