Messier Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction
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Messier Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,000,000 of 11% term corporate bonds on March 1, 2012, due on March 1, 2027, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 10%.
Instructions
As the controller of the company, determine the selling price of the bonds.
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Formula for the interest payments PV OA R PVF OA n i PV OA 165000 PVF OA 30 5 PV OA 165000 15...View the full answer
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