Lunar, Inc., plans to issue $900,000 of I 0% bonds that will pay interest semiannually and mature
Question:
Lunar, Inc., plans to issue $900,000 of I 0% bonds that will pay interest semiannually and mature in 5 years. Assume that the effective interest rate is 12% per year compounded semiannually. Compute the selling price of the bonds. Use Tables A.2 and A.3 in Appendix A.
Table A.2:
Table A.3
Transcribed Image Text:
Present Value of Single Amount p=1/ (1+1)' TABLE A.2 Interest Rate Period 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.99010 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 2 0.98030 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.97059 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 4 0.96098 O 92395 0.88849 0.85480 0.82270 0.79209 0.76290 073503 0.70843 0.68301 0.65873 0.63552 5. 0.95147 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 6. 0.94205 0.68797 0.83748 0,79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 7 0.93272 0.87056 0.81309 0.75992 0.71058 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.92348 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.91434 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 10 0.90529 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 11 0.89632 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 12 0.88745 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 13 0.87866 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 14 0.86996 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 15 0.66135 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 16 0.85282 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 17 0.84438 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 18 0.83602 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 19 0.82774 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 20 0.81954 0.67297 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 21 0.81143 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.1174 0.09256 22 0.80340 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 23 0.79544 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 24 0.78757 0.62172 0.49193 0.39012 0.31007 0.24698 0. 19715 0.15770 0.12640 0.10153 0.08170 0.06588 25 0.77977 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14802 0.11597 0.09230 0.07361 0.05882 0. 13520 0. 10639 26 0.77205 0.59758 0.46369 0.36069 0.28124 0.21981 0.17220 0.08391 0.06631 0.05252 27 0.76440 0.58586 0.45019 0.34682 0.26785 0.20737 0.16093 0.12519 0.09761 0.07628 0.05974 0.04689 28 0.75684 0.57437 0.43708 0.33348 0.25509 D. 19563 0.15040 0.11591 0 08955 0.06934 0.05382 0.04187 29 0.74934 0.56311 0.42435 0.32065 0.24295 0. 18456 0.14056 0.10733 0.08215 0.06304 0.04849 0.03738
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (12 reviews)
900000 x 055839 ...View the full answer
Answered By
Susan Juma
I'm available and reachable 24/7. I have high experience in helping students with their assignments, proposals, and dissertations. Most importantly, I'm a professional accountant and I can handle all kinds of accounting and finance problems.
4.40+
15+ Reviews
45+ Question Solved
Related Book For
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
Question Posted:
Students also viewed these Business questions
-
The effective tax rate is 20% on all items. Ayayai prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments...
-
Answer the five questions in short answer format. A paragraph or two will be enough to answer the question. 1.Describe an industry that seems to have strong competitive rivalry ( besides the soft...
-
When the effective interest rate is higher than the stated interest rate on a bond issue, will the bond sell at a discount or premium? Why?
-
The following table describes a randomized trial comparing an experimental medication to a placebo for treatment of reflux. Experimental Treatment Placebo (n = 100) Patient Characteristics (n = 100)...
-
An insulated cylinder/piston has an initial volume of 0.15 m3 and contains steam at 400 kPa, 200oC. The steam is expanded adiabaticly, and the work output is measured very carefully to be 30 kJ. It...
-
What is the difference between a strategy and a tactic?
-
An individuals roles influence that persons buying behavior. Identify two of your roles, and give an example of how they have influenced your buying decisions.
-
Bishop, Inc., has current assets of $5,700, net fixed assets of $27,000, current liabilities of $4,400, and long-term debt of $12,900. What is the value of the shareholders equity account for this...
-
Find the measure of each marked angle. x*=* (x+20)= (190 3x1 o (x+20) (190-3x)
-
You are employed by McDowell and Partners, Chartered Accountants (M&P). A new client, Community Finance Corporation (CFC), approached M&P for assistance. Enviro Ltd. (Enviro) has asked CFC for a loan...
-
On December 31, 2018, Kasznik, Inc., issued $720,000 of 11%, 10-year bonds for $678,708, yielding an effective interest rate of 12%. Semiannual interest is payable on June 30 and December 31 each...
-
The following disclosures were provided by Siemens AG in its 2018 annual report: Product-related expenses: Provisions for estimated costs related to product warranties are recorded in line item Cost...
-
A ball is dropped from the roof of a tall building and students in a physics class are asked to sketch a motion diagram for this situation. A student submits the diagram shown in Figure Q 1.4. Is the...
-
Doyle and company provide the following information about the standard cost per unit for their only product. Price$120.00 Variable manufacturing costs80.00 Fixed manufacturing costs20.00 Variable...
-
Calculate the percentage of O2 is on based on the followingliters. 1. 6 Liters of O2= 2. 12 Liters of O2= 3. 15 Liters of O2= 4. What safety instruction should be included when educating thepatient...
-
Earl's savings account has an APR of 7.3%, calculates interest daily, and pays interest at the end of the month. If during the month of June, his balance was $400 for the first 10 days of the month,...
-
Company XYZ.s stock prices and the market index for the past four years are given in the following table. The current risk free rate is 7.2%. Use the data answer the following questions (Of course,...
-
Let A ben x n matrix with eigenvalues A, A,..., An a) Show that the determinant of A is equal to the product of its eigenvalues, i.e., det(A) = I=1^j. [20 points] b) The trace of a matrix is defined...
-
Suppose on January 1, Andrew's Tavern prepaid rent of $16,800 for the full year. At November 30, how much rent expense should be recorded for the period January 1 through November 30?
-
According to a recent survey, 40% of millennials (those born in the 1980s or 1990s) view themselves more as spenders than savers. The survey also reveals that 75% of millennials view social...
-
The accounting records of Orth Electronics show the following data. Beginning inventory ..... 3,000 units at $5 Purchases ........ 8,000 units at $7 Sales ............ 9,400 units at $10 Determine...
-
Bardell Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows. Determine the value of the company's inventory...
-
Early in 2012, Aragon Company switched to a just-in-time inventory system. Its sales and inventory amounts for 2011 and 2012 are shown below. Determine the inventory turnover and days in inventory...
-
4. Qu tipo de empresas podran emplear un mercado de empresas privadas? Qu tipo de empresas podra participar en el mercado de una empresa privada? Cmo es un mercado de empresas privadas diferente de...
-
Camby Corp. can make one of the following four products: Product 1 Product 2 Product 3 Product 4 Selling price per unit $109.00 $186.00 $306.00 $45.00 Variable cost per unit $38.00 $120.00 $191.00...
-
If the order quantity (Q) for raw materials is increased, how does it affect ordering cost and/or holding cost? Group of answer choices Holding cost decreases No impact on ordering and holding costs...
Study smarter with the SolutionInn App