The following information pertains to BARU NUTS Company's issuance of bonds on July 1, 2021:WHAT SHOULD BE THE ISSUE PRICE OF THE BONDS?(Solution must be in good accounting form. Excel format would be good for a good accounting form! Thanks a lot, Tutor! I hope you can help me) P 1,000,000 Interest paymentsEffective yieldFace amountJuly 1 and January 1Term10 years12%Stated interest rate8%4%6%8%12%PV of an ordinary annuity of 1 for 10 periodsPV of an ordinary annuity of 1 for 20 periodsPV of a single amount for 10 periodsPV of a single amount for 20 periods8.117.366.716.1413.5911.479.828.510.680.560.460.320.460.310.210.31

Interest=Face amount×Stated interest rate2=1,000,000×8%2=40,000

The following information pertains to BARU NUTS Company's issuance of bonds on July 1, 2021: WHAT SHOULD BE THE ISSUE PRICE OF THE BONDS? (Solution must be in good accounting form. Excel format would be good for a good accounting form! Thanks a lot, Tutor! I hope you can help me)

The following information pertains to BARU NUTS Company's issuance of bonds on July 1, 2021: WHAT SHOULD BE THE ISSUE PRICE OF THE BONDS? (Solution must be in good accounting form. Excel format would be good for a good accounting form! Thanks a lot, Tutor! I hope you can help me)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tait is entering high school and is determined to save money for college. Tait feels he can save $2,500 each year for the next four years from his part-time job. If Tait is able to invest at 6%, how much will he have when he starts college? (Click the icon to view Present Value of $1 table.) E (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) E (Click the icon to view Future Value of Ordinary Annuity of $1 table.) - X Reference (Round your answer to the nearest dollar.) Reference When Tait starts college he will have Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Future Value of $1 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.917 0.909 0.893 | 0.877 0.870 0.862 0.847 0.833 0.826 0.797 0.769 0.756 0.743…
Net present value-unequal lives Project 1 requires an original investment of $50,100. The project will yield cash flows of $10,000 per year for 8 years. Project 2 has a computed net present value of $11,600 over a 6-year life. Project 1 could be sold at the end of 6 years for a price of $38,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 6% 10% Year 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 0.943 0.890 0.840 0.792 0.747 7 0.705 0.665 0.627 0.592 0.558 0.943 1.833 2.673 3.465 4.212 4.917 0.909 5.582 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.909 1.736 2.487 3.170 3.791 4.355 12% 4.868 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.893 1.690 2.402 3.037 3.605 4.111 15% 4.564 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.870 1.626 2.283 2.855 3.353…
The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 2 Year 3 4 5 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 6 7 8 9 10 1 1 2 3 2 4 5 6 3 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 12% 0.792 0.747 0.705 0.665 0.627 0.592 0.558 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.943 1.833 2.673 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 Net Cash Flows Servers $165,000 165,000 165,000 165,000 0.909 1.736 2.487 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322…
The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 1 2 3 4 2 Year 5 6 3 7 8 9 10 4 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 5 6 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 0.792 0.747 0.705 0.665 0.627 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.592 0.558 0.909 0.826 0.751 0.683 0.621 0.564 0.513 Net Cash Flows Servers 0.467 $165,000 165,000 165,000 165,000 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432…
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Internal Rate of Return Method The internal rate of return method is used by King Bros. Construction Co. in analyzing a capital expenditure proposal that involves an investment of $110,610 and annual net cash flows of $18,000 for each of the 10 years of its useful life. Present Value of an Annuity of $1 at Compound Interest 6% Year 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 1.626 1.528 1.833 1.736 1.690 2.402 2.283 2.673 2.487 2.106 3.170 3.465 3.037 2.855 2.589 2.991 4.212 3.791 3.605 3.352 4.111 4.917 4.355 3.784 3.326 5.582 4.868 4.564 4.160 3.605 4.487 3.837 6.210 5.335 4.968 6.802 5.759 5.328 4.772 4.031 5.650 10 7.360 6.145 5.019 4.192 a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round ecimal places. your answer to three
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Net Present Value Method for a Service Company Opulence Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Bellwether, can hold up to 3,200 passengers and it can cost $640 million to build. Assume the following additional information: There will be 300 cruise days per year operated at a full capacity of 3,200 passengers. • The variable expenses per passenger are estimated to be $95 per cruise day. The revenue per passenger is expected to be $475 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $94,848,000 per year. • The ship has a service life of 10 years, with a residual value of $100,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7…
b C d (D Find the future value of ordinary annuity of the following items: Sinking Fund Payment Payment Period every 6 months every year every 3 months every month every 3 months Time Period 8 years 14 years 5 years 1½ years 4 years Nominal Rate 10% 9% 12% 12% 16% Interest Compounded semi-annually annually quarterly monthly quarterly Future Value 500,000 2,500,000 15,000 40,000 187,000
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Questic Present Value of Annuity Not ye Annuity Years Interest Rate Compounding Due Marke $100.00 37 20.00% Weekly P Flac O a. $42,071,286.08 O b. $41,910,093.41 O c. $26,083.82 O d. $25,983.88 X N hp
EACTIVITY # 1 Find the future value and present value using the ordinary annuity and. No. Principal Rate Mode of Payment Term 3 years 5 years 10 years 12 years 2% P40,000 P100,000 P340,000 P1,240,000 Annually Quarterly Monthly Semiannually 4% 6% 9% 1234