Question

Can
you explain the concept of a sinking fund?

Answer #1

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Why might it be more accurate to describe a sinking fund
as a bond redemption fund? please explain

A sinking fund can be set up in one of two ways. Discuss the
advantages and disadvantages of each procedure from the viewpoint
of both the firm and its bondholders. Must be an original answer.
Please and thank you.

You are paying into a sinking fund that earns 6%. If the
payments are $15,000 per year, how much will be in the fund in 15
years?

Which of the following statements about sinking fund is true?
(why is C correct?)
a) A company would prefer to use sinking fund to call bond if
bond sells at a discount price.
b)Sinking funds are designed to protect bondholders, so it never
hurts the bondholders in any situations.
c)A company would use sinking fund for open market purchase of
bond if the interest rate is much higher than its coupon rate.
d) A company would prefer to use sinking...

A three-year sinking fund loan for $? at ?=5.2% and ?=3% has
annual payments of $100.
a. Find ??]?&?
b. Find ?.
c. Find the interest on the loan at time 1.
d. Find the sinking fund deposit at time 1.
e. Find the interest on the sinking fund account at time 1.
f. Find the interest on the sinking fund account at time 2.
please show all work, no excel

2. You are a corporate treasurer who will purchase $1m of bonds
for the sinking fund in 3 months. You believe rates soon will fall
and would like to repurchase the company's sinking fund bonds,
which currently are selling below par, in advance of requirements.
Unfortunately, you must obtain approval from the board of directors
for such a purchase, and this action can take up to 2 months. What
action can you take in the futures market to hedge any...

A company borrowed $ 74,500. The company plans to set up a
sinking fund that will pay back the loan at the end of 6 years.
Assuming a rate of 6% compounded semiannually, find the Sinking
Fund of the ordinary annuity. (please make answer clear not
handwriting)

Which of the following statements regarding “Sinking Fund
Provision” is most correct?
Select one:
a. A firm will choose to call back bonds for redemption at par
value if the bonds are traded at a discount.
b. In general, sinking fund bonds are issued with lower coupon
rate than otherwise similar bonds without sinking funds.
c. On balance, bonds that have a sinking fund are regarded as
being riskier than those without such a provision.
d. A sinking fund provision...

Part of the income that a machine generates is put into a
sinking fund to replace the machine when it wears out. If $2,000
is deposited annually at 8% interest, how many years must the
machine be kept before a new machine costing $55,000 can be
purchased?

a
regular saving of 350$ is made into a sinking fund at the start of
each year for 7 years. Determine the final value of the fund if the
rate of interest is 10% compounded anually

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