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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Suppose the Omega Graphics Company wishes to set aside an equal, annual, end-of-year amount in a “sinking fund account” earning 8.5 percent per annum over the next six years. The firm wants to have $5 million in the account at the end of six years to retire (pay off ) $5 million in outstanding bonds. How much must be deposited in the account at the end of each year? Hint: Use the math formula.
Dinesh
122. 15 years earlier, GP&L issued $1,000,000 in 12 percent, 30-year, semiannual payment notes. The bonds are not callable, but they do have a sinking fund that allows GP&L to repay 5% of the problem's initial face value ($50,000) per year starting in Year 11 before the issue is fully redeemed. Up to this stage, 25% of the topic has been retired. The corporation will either call bonds at par for sinking fund purposes or buy bonds in the open market, paying enough funds per year to repay 5% of the initial face value. What is the smallest sum of capital GP&L would put up to meet the sinking fund clause if the nominal yield to maturity (15 years remaining) on the bonds is actually 14 percent? a. $43,856b. $50,000c. $37,500d. $43,796e. $39,422
The company has made an investment in government bonds. The bonds will generate an interest income of OMR 20623 each year for 6 years. The interest rate is 12% annually. Compute present value of the stream of interest income for 6 years. Select one: O a. 105412.55 O b. 84789.55 Oc. 64166.55 O d. 5016.04 O e. All the given choices in this question are not correct
Sepia Inc. issued $350,000 bonds that were redeemable in 7 years. They established a sinking fund that was earning 5.50% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made into the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposits. b. Calculate the sinking fund balance at the end of the 4th payment period. c. Calculate the amount of interest earned during the 5th payment period. d. Calculate the amount by which the sinking fund increased in the 5th payment period.
Blossom Company issued $700,000, 9-year bonds. It agreed to make annual deposits of $75,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 4% annual interest. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 9 years? (Round answer to 2 decimal places, e.g. 25.25.) Amount in the sinking fund $ 803100.94
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?
Please answer all questions and show all calculations. Thank you.
Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinking fund that was earning 4.87% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposit. b. Calculate the sinking fund balance at the end of the payment period 8. c. Calculate the interest earned in payment period 9. d. Calculate the amount by which the sinking fund increased in payment period 9.
Oriole Company issued $1,000,000, 9-year bonds. It agreed to make annual deposits of $77,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 9% annual interest. Click here to view the factor table. What amount will be in the sinking fund at the end of 9 years? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, eg. 25.25) Amount in the sinking fund $

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