Kingbird Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,250,000 of 11% term corporate bonds on March 1, 2023, due on March 1, 2037, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 10%. (a) As Kingbird's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Selling price of the bonds $
Kingbird Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,250,000 of 11% term corporate bonds on March 1, 2023, due on March 1, 2037, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 10%. (a) As Kingbird's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Selling price of the bonds $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kingbird Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a
new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has
decided to raise funds for the new plant by issuing $2,250,000 of 11% term corporate bonds on March 1, 2023, due on March 1, 2037,
with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments
is 10%.
(a)
As Kingbird's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g.
1.25124 and final answer to O decimal places, e.g. 5,275.)
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.
Selling price of the bonds $
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