Attempts: 1 of 1 user(b2)Novak Corporation, having recently issued a $ 20,006,100, 15-year bond issue, is committed to make annual sinking funddeposits of $ 619,000. The deposits are made on the last day of each year and yield a return of 10%.Click here to view factor tablesDetermine the amount of deficiency. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to0 decimal places, e.g.458,581.)DeficiencyAttempts: 0 of1 usedSubmit AnswerSave for Later(c)The parts of this question must be completed in order. This part will be available when you complete the part above.

Future Value of an Ordinary Annuity = C*[(1+i)^n-1]/i Where, C= Cash Flow per period i =…

Answered: Novak Corporation, having recently…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
an a&e firm planning for a future expansion deposited $36000 each year for 5 years into a sinking (investment) fund that was to pay an unknown rate of return. if the account had a total of $454000 immediately after the fifth deposit, what rate of return did the company make on these deposits?
Maju City issued a RM700,500.00 face vale bond with four years until maturity. It will make contributions at the end of every semiannual to a sinking fund earning （5 and 2/7）% compounded semi-annually. Construct a complete sinking fund schedule and calculate the total interest earned.
2,500 is deposited into Fund X, which earns an annual effective rate of zero. At the end of each year, 10% of the balance is withdrawn from the fund. The annual withdrawals are deposited into Fund Y, which earns an annual effective rate of 10%. Determine the accumulated value of Fund Y at the end of year 10. a) 2,806 b) 2,252
Click here to view the factor table. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf
5. An amount is deposited for eight years at 6%. If compounding occurs semiannually, then the table value is found at a) 6% for eight periods. b) 3% for eight periods. 3% for 16 periods. 6% for 16 periods 6. Sue Gray wants to withdraw $10,000 (including principal) from an investment fund at the beginning of each year for three years. How should she compute her required initial. investment at the beginning of the first year if the fund earns 12% compounded quarterly? a) $10,000 times the present value of a 3-period, 12% annuity due of 1. $10,000 times the present value of a 12-period, 3% annuity due of 1. $10,000 times the present value of a 3-period, 12% ordinary annuity of 1. d) $10,000 times the present value of a 12-period, 3% ordinary annuity of 1. moro Pr
An insurance company issued a $90 million one-year, zero- coupon note at 8 percent add-on annual interest (paying one coupon at the end of the year) and used the proceeds plus $10 million in equity to fund a $100 million face value, two-year commercial loan at 10 percent annual interest. Immediately after these transactions were (simultaneously) undertaken, all interest rates went up 1.5 percent. (LG 22-3) 1- What is the market value of the insurance company’s loan investment after the changes in interest rates? 2- What is the duration of the loan investment when it was first issued? 3- Using duration, what is the expected change in the value of the loan if interest rates are predicted to increase to 11.5 percent from the initial 10 percent? 4- What is the market value of the insurance company’s $90 million liability when interest rates rise by 1.5 percent? 5- What is the duration of the insurance company’s liability when it is first issued? Use excel for solving
Swifty Corporation, having recently issued a $20,139,700, 15-year bond issue, is committed to make annual sinking fund deposi of $616,500. The deposits are made on the last day of each year and yield a return of 10%. Click here to view factor tables. Will the fund at the end of 15 years be sufficient to retire the bonds? Future value of an ordinary annuity Will funds be sufficient?
Culver Corporation, having recently issued a $20,062,200, 15-year bond issue, is committed to make annual sinking fund deposits of $620,000. The deposits are made on the last day of each year and yield a return of 10%. Click here to view factor tables Determine the amount of deficiency. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Deficiency $
Answer ASAP please write the formula used please.
1. To calculate the after-tax cost of debt, multiply the before-tax cost of debt by ______. 2. Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WGC’s after-tax cost of debt is ________. (rounded to two decimal places). 3. At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,555.38 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 4.73% 4.11% 4.93% 3.29%
3. Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding period is the same as the payment period. FU $13,690 to be accumulated in 3 years; quarterly payments of $1025 The interest rate needed is approximately %. (Type an integer or decimal rounded to two decimal places as needed.)

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