What are the formulas I need to solve the PV factors used for
the single sum and annuity? Also for the PV face ad PV
interest?
NFT Consulting
and Sales Inc |
Cash Received/Annual Cash
Payment Requirement |
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The company could
issue $2,000,000 of long-term bonds, due in 5 years with a stated
rate of interest, paid semiannually, of 4%. The market rate for
similar debt is 6%. |
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Cash Received |
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Annual Cash Required |
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1,829,395.94 |
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$2,000,000 |
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Face amount |
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2,000,000 |
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Face rate |
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4% |
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Interest Payment periods |
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10 |
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Interest Payment |
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40,000 |
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Term |
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5 |
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Periods |
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10 |
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Market rate |
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6% |
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PV factors used |
single sum |
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annuity |
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PV face |
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PV interest |
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