Question

1. Fenland Co. plans to retire $210 million in bonds in five years, so it wishes...

1. Fenland Co. plans to retire $210 million in bonds in five years, so it wishes to fund a savings account at the beginning of each year during that period for which it expects to earn 12% annually. At the end of the five years, there will be enough money in the account to pay off the bonds. What amount does Fenland need to invest each year? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

2. Present and future value tables of $1 at 11% are presented below.

PV of $1 FV of $1 PVA of $1 FVA of $1
1 0.90090 1.11000 0.90090 1.0000
2 0.81162 1.23210 1.71252 2.1100
3 0.73119 1.36763 2.44371 3.3421
4 0.65873 1.51807 3.10245 4.7097
5 0.59345 1.68506 3.69590 6.2278
6 0.53464 1.87041 4.23054 7.9129

Titanic Corporation leased executive limousines under terms of $120,000 to be paid at the inception of the lease, and four equal annual payments of $130,000 to each be paid thereafter on the anniversary date of the lease. The interest rate implicit in the lease is 11%. The first year's interest expense would be:( Round your intermediate calculations and final answers to the nearest dollar amount.)

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