To raise $5,500,000 to expand into new markets, a very successful laptop manufacturing company issued bonds in the market with a coupon rate of 7.50%, paying interest every 6 months, and redeemable in 18 years. They established a sinking fund to retire this debt on maturity and made equal deposits into the fund at the end of every half-year. a. If the fund was earning 3.60% compounded semi-annually, calculate the periodic cost of the debt. $0.00 Round to the nearest cent b. Calculate the book value of the debt after 7 years. $0.00 Round to the nearest cent

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A: Sinking fund refers to a fund started by the company which saves or set aside some fund or money…

Q: To provide for expansion, a company has established a sinking fund earning 9% semi-annually. The…

A: Future value is the estimated current value of future cash flows that is discounted at an assumed…

Q: A company deposited $12,500 into an investment fund at the beginning of every quarter for 5 years.…

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Q: ranklin's investment fund had a balance of $270,000 on January 1, 1995 and a balance of $449,000 two…

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A: The rate of return on investment refers to the percentage of profits or earnings out of the…

Q: Consider the following investment: $1,000 placed into a fund at the beginning of every quarter at an…

A: The sum of all these future cash flows at a given future date is represented as the annuity's future…

Q: se $5,000,000 to expand into new markets, a very successful laptop manufacturing company issued…

A: The bonds carry the semi annual payment of interest and face value of bond on the maturity of bond…

Q: Crane Telecommunications Corp. has made an investment in another company that will guarantee it a…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Find the interest rate needed to accumulate $45,000 in a sinking fund in 10 years, with annual…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: Bramble Corporation, having recently issued a $20,094,900, 15-year bond issue, is committed to make…

A: The question is based on the concept Annuity

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A: Future value of money includes the amount being deposited over the period of time and interest…

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A: Annual payment (C) = $620,000 Rate of return (r) = 0.10 Period (n) = 15 Years Future value of…

Q: Crane Company will invest $830000 today. The investment will earn 4% for 6 years, with no funds…

A: Investment fund at the end of 6 years = Initial invetment x Future value factor (4%, 6 years)

Q: sets and $54 thousand in rate - sensitive liabilities for the next three month period. he bank's…

A: Funding gaps indicates that how much money needed to fund the future liabilities and how much is…

Q: To raise $4,000,000 to expand into new markets, a very successful laptop manufacturing company…

A: Face Value = $4,000,000 Coupon rate = 2.5% Time period = 19 Years

Q: To raise $5,000,000 to expand into new markets, a very successful laptop manufacturing company…

A: Periodic cost of the debt here will be the periodic interest paid and the amount deposited in the…

Q: A company sold $200,000 bonds and set up a sinking fund that was earning 8.5% compounded…

A: A bond refers to an instrument that shows loan amount with interest rates made by an investor to a…

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A: Solution:- When an equal amount is receivable each period, it is called annuity. So, present value…

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A: Sinking Fund refers to amount which is set aside from profits to meet future known liability. It…

Q: Franklin's investment fund had a balance of $270,000 on January 1, 1995 and a balance of $449,000…

A: Average date of payment refers to the date at which the amount owed to be paid by the borrower to…

Q: Will the fund at the end of 15 years be sufficient to retire the bonds? If not, what will the…

A: Future value: This is the amount of present value accumulated or compounded at a rate of interest…

Q: A business must raise $70,000 in 7 years. What should be the size of the owners' quarterly payment…

A: FV = A × Where,FV = future value A = periodic payments r = interest rate n = time period.

Q: A company deposited $5,500 into an investment fund at the beginning of every quarter for 6 years. It…

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Q: t the beginning of the year, an investment fund was established with an initial deposit of 500 . A…

A: The dollar-weighted return is the return that is earned on the investment amount during the period.

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A: The question is based on the concept of Financial Management.

Q: A company deposited $14,500 into an investment fund at the beginning of every quarter for 7 years.…

A: The accumulated value of any fund is equal to the sum of future value of all the deposits made…

Q: Bright Inc. will be receiving $5,500 at the end of every month for the next 2 years. If these…

A: The objective of this question is to calculate the future value of a series of monthly payments…

Q: Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making equal…

A: a)  Size of the quarterly payment N = 5*4 =20 I/Y = 8/4 = 2 PV =0 FV = -600,000 Compute PMT

Q: what rate of return did the company make on these deposits

A: A company uses a sinking fund investment account to avoid default in payment of the debt. A fixed…

Q: Your objective is to have $25,650 in exactly 15 years. Today you invest $9,000 in a Schwab…

A: Amount after 7 years=$9000×(1+rate)n Where, Rate=6.1%N=7Amount=$9000×(1.061)7=18919.85

Q: Suppose the Omega Graphics Company wishes to set aside an equal, annual, end-of-year amount in a…

A: Future Value required in 6 years is $5,000,000Calculating the Annual Deposit to be made each year…

Characteristics of Bonds