1) A company issues $16600000, 9.8%, 20-year bonds to yield 10% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $16315159. Using effective-interest amortization, how much interest expense will be recognized in 2020?

a. $1631634

b. $1626800

c. $1631510

d. $813400

2) Coronado Industries requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $507000. Location B may be acquired with a down payment of $101400 and annual payments at the end of each of the next twenty years of $50700. Location C requires $40560 payments at the beginning of each of the next twenty-five years. Assuming Coronado's borrowing costs are 8% per annum, which option is the least costly to the company?

a. Location C.

b. Location A and Location B.

c. Location A.

d. Location B.

3) Bonita Industries will receive $400000 in a future year. If the future receipt is discounted at an interest rate of 7%, its present value is $285196. In how many years is the $400000 received?

a. 5 years

b. 3 years

c. 4 years

d. 6 years