To raise $6,000,000 to expand into new markets, a very successful laptop manufacturing company issued bonds in the market with a coupon rate of 8.00%, paying interest every 6 months, and redeemable in 17 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. If the fund was earning 4.20% compounded semi-annually, calculate the periodic cost of the debt. Calculate the book value of the debt after 11 years.

Q: You are the finance manager for a particular company. The company plans to purchase $3,000,000 in…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: A company sold $250,000 bonds and set up a sinking fund that was earning 8% compounded semi-annually…

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

Q: You are the finance manager for a particular company. The company plans to purchase $3,000,000 in…

A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: 12) What is the annualized cost of the debt for a sinking fund that has semi-annual deposits and it…

A: Annuity means finite no. of payments which are same in size and made in equal intervals for the…

Q: You are the finance manager for a particular company. The company plans to purchase $3,000,000 in…

A: Price of the assembly (P) = $3000000 duration (n) = 5 years

Q: To raise $5,500,000 to expand into new markets, a very successful laptop manufacturing company…

A: To find the periodic cost of debt, we will have to find 2 amounts, first for the semi-annual payment…

Q: You are the finance manager for a particular company. The company plans to purchase $2,000,000 in…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

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: 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

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: interest dues on it. Three years from this withdrawal you start taking Php 20,000 per year out of…

A: Solution:- Calculation of Schedule of Investment fund ( Amount in Php) Year Opening balance…

Q: Culver Corporation, having recently issued a $20,062,200, 15-year bond issue, is committed to make…

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: Fifteen years ago deposited 12500 in to an investment fund.five years ago you added an additional…

A: a) The computation of effective annual rate for 10 year: Hence, the effective annual rate is 8.16%.

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Calculation of effective annual rate (EAR): Answer: Effective annual rate (EAR) is 8.16%

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…

Q: Sarasota Corporation, having recently issued a $20,134,100, 15-year bond issue, is committed to make…

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

Q: Sevim wants to create a savings of 95,000 TL at the end of 30 years. For this purpose, it plans to…

A: This question had two parts we had to find future value of both parts.

Q: You are the finance manager for a particular company. The company plans to purchase $2,000,000 in…

A: Given information : Price of machine $2,000,000 Time period  (years) 5

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Time value of money techniques helps us to find the values of the deposits at different time…

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

A: Solution:- When an equal amount is deposited each period at beginning of period, it is called…

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Given information: Amount deposited is $12,500 Interest rate is 8% semi-annually for first 10 years…

Q: Coronado Corporation, having recently issued a $ 20,153,400, 15-year bond issue, is committed to…

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

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: The effective annual rate is the actual rate earned after considering the compounding periods in a…

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: 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: The Joshi Fish Farm (JFF), a saltwater aquarium company, is planning to expand its operations. It…

A: In this case, the principal is the amount invested, the interest rate is 6%, and the time is 3…