Question

Please fill out information based off information provided. Please explain each answer if possible. The company...

Please fill out information based off information provided. Please explain each answer if possible.

The company could issue $3,000,000 of long-term bonds, due in 8 years with a stated rate of interest, paid semiannually, of 4%. The market rate for similar debt is 6%.  
Cash Received.......? Annual Cash Required.......?
Face amount......?
Face rate.......?
Interest Payment periods........?
Interest Payment ........?
Term.........?
Periods.........?
Market rate.........?
PV factors used .......? single sum
annuity
PV face........?
PV interest.........?
The company could issue $2,500,000 of long-term bonds, due in 7 years with a stated rate of interest, paid semiannually, of 6%. The market rate for similar debt is 4%.
Cash Received Annual Cash Required
Face amount
Face rate
Interest Payment periods
Interest Payment  
Term
Periods
Market rate
PV factors used single sum
annuity
PV face
PV interest
Business   Accounting   
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Answer #1
Req a:
Face amount 3000000
Face rate 4%
Interest payment period 6 months
Interest payment    60000
(3000,000*4%*6/12)
Term 8
Periods 16
Market rrate 6%
PV factors sued
Single sum 0.62317
Annuity 12.5611
Present value of face value 1869510
Present value of interest 753666
Cash received 2623176
Req b:
Face amount 2500000
Face rate 6%
Interest payment period 6 months
Interest payment    75000
(2500,000*6%*6/12)
Term 7
Periods 14
Market rrate 4%
PV factors sued
Single sum 0.757875
Annuity 12.10625
Present value of face value 1894688
Present value of interest 907968.8
Cash received 2802656
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