Question

Waterway Inc. issues $2,117,200 of 8% bonds due in 12 years with interest payable at year-end....

Waterway Inc. issues $2,117,200 of 8% bonds due in 12 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 9%.

Click here to view factor tables

What amount will Waterway receive when it issues the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)

Amount received by Waterway when bonds were issued $_________
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Bond characterstics Amount
1-a) Principal 2,117,200
interest            169,376
Market interest rate 9%
periods to maturity 12
issue price 1,965,584 answer
Calculation of bond issue price
Where
i= 9.00%
t= 12
principal * PV of $1 at 9% for 12 yrs =
2,117,200 * 0.35553        = 752728
interest * PV of ordinary annuity at 9%=
169376 * 7.16073 = 1212856
bond issue price 1965584
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Kingbird Inc. issues $2,085,900 of 9% bonds due in 12 years with interest payable at year-end....
Kingbird Inc. issues $2,085,900 of 9% bonds due in 12 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 10%. Click here to view factor tables What amount will Kingbird receive when it issues the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Amount received by Kingbird when bonds were issued?
Whispering Inc. issues $4,200,000 of 7% bonds due in 12 years with interest payable at year-end....
Whispering Inc. issues $4,200,000 of 7% bonds due in 12 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 12%. What amount will Whispering receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to 0 decimal places, e.g. 458,581.) Amount received by Whispering when bonds were issued ——$
Stacy Alvarez is investing $381,500 in a fund that earns 11% interest compounded annually. Click here...
Stacy Alvarez is investing $381,500 in a fund that earns 11% interest compounded annually. Click here to view factor tables What equal amounts can Stacy withdraw at the end of each of the next 16 years? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Yearly withdrawals $ Chris Inc. will deposit $56,600 in a 11% fund at the end of each year for 7 years beginning December 31, 2020. Click...
Using the appropriate interest table, compute the present values of the following periodic amounts due at...
Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods. Click here to view factor tables $50,440 receivable at the end of each period for 8 periods compounded at 11%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Present value $ Click here to view factor tables $50,440 payments to be made at the end of each period...
Using the appropriate interest table, answer each of the following questions. (Each case is independent of...
Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.) Click here to view factor tables What is the future value of $7,020 at the end of 7 periods at 8% compounded interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The future value $enter the future value in dollars rounded to 0 decimal places eTextbook and Media Click here to view...
Newman Madison needs $294,200 in 10 years. Click here to view factor tables How much must...
Newman Madison needs $294,200 in 10 years. Click here to view factor tables How much must he invest at the end of each year, at 15% interest, to meet his needs? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Investment amount $enter the dollar amount invested rounded to 0 decimal places Sandhill Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a...
Windsor Corporation issues $570,000 of 9% bonds, due in 10 years, with interest payable semiannually. At...
Windsor Corporation issues $570,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds $enter the issue price of the bonds rounded to 0 decimal places
M Corporation issues $460,000 of 9% bonds, due in 11 years, with interest payable semiannually. At...
M Corporation issues $460,000 of 9% bonds, due in 11 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. *see the future value/present value factor table* Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds $enter the issue price of the bonds rounded to 0 decimal places
Waterway Railroad Co. is about to issue $460,000 of 6-year bonds paying an 7% interest rate,...
Waterway Railroad Co. is about to issue $460,000 of 6-year bonds paying an 7% interest rate, with interest payable semiannually. The discount rate for such securities is 8%. Click below to view the factor tables. Table 1. Future Value of 1 Table 2. Future Value of an Annuity of 1 Table 3. Present Value of 1 Table 4. Present Value of an Annuity of 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) In...
1, Leon Taylor is settling a $19,080 loan due today by making 6 equal annual payments...
1, Leon Taylor is settling a $19,080 loan due today by making 6 equal annual payments of $4,640.74. Click here to view factor tables Determine the interest rate on this loan, if the payments begin one year after the loan is signed. (Round answer to 0 decimal places, e.g. 8%.) 2, Sally Alvarez is investing $395,500 in a fund that earns 9% interest compounded annually. Click here to view factor tables What equal amounts can Sally withdraw at the end...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT