Question
1. Sarasota Company recently signed a lease for a new office building, for a lease period of10years. Under the lease agreement, a security deposit of
1. Sarasota Company recently signed a lease for a new office building, for a lease period of10years. Under the lease agreement, a security deposit of $14,720is made, with the deposit to be returned at the expiration of the lease, with interest compounded at5% per year. What amount will the company receive at the time the lease expires? The company will receive:
2. Ivanhoe Corporation, having recently issued a $20,062,200,15-year bond issue, is committed to make annual sinking fund deposits of $620,000. The deposits are made on the last day of each year and yield a return of10%. Will the fund at the end of15years be sufficient to retire the bonds? Future value of an ordinary annuity is & Will funds be sufficient?
3. Ivanhoe Corporation, having recently issued a $20,062,200,15-year bond issue, is committed to make annual sinking fund deposits of $620,000. The deposits are made on the last day of each year and yield a return of10%. Determine the amount of deficiency.
4. Under the terms of his salary agreement, president Henry Walters has an option of receiving either an immediate bonus of $77,000, or a deferred bonus of $98,000payable in10years. Ignoring tax considerations and assuming a relevant interest rate of4%, which form of settlement should Walters accept?
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