$1.$ Your company is considering a $10-$year bond issue in order to fund a future plant expansion of their

manufacturing site. Assume that your company has a $12/31$ fiscal year$-$end, the bond will be issued on

$1/1/25,$ and interest will be paid twice a year $($on $6/30$ and $12/31).$ You should choose the face value,

stated rate and effective rate of interest.

$2.$ Your company is also purchasing a new building to house its corporate headquarters. They are in

negotiations with the bank to obtain a mortgage. The $20-$year mortgage will call for payments at the

end of each month. Assume that your company has a $12/31$ fiscal year$-$end and that the mortgage will

be issued on $1/1/25.$ You should choose the building value and mortgage rate of interest.

Prepare a spreadsheet using professional template design that will show senior management the cash flow,

balance sheet and income statement implications of each borrowing $($i$.$e$.$ an amortization table$).$ You should

use one Excel file but a separate worksheet for each borrowing.

You should use the PV and PMT functions in Excel where necessary for time value computations. You should

NOT use the factors from the Present Value tables in your textbook or elsewhere.

Your amortization table should include the payment date $($use EOMONTH function$),$ cash payments, interest

expense, amortization$/$principal reduction, and the carrying value of the liability at the end of each period. The

amortization table should use the effective interest method to compute interest expense. The bond

amortization schedule should be prepared to accommodate a Premium or Discount with all numbers on the

schedule appearing as positive values $($Hint $$ use IF function$).$

A professionally designed spreadsheet will contain separate sections for INPUTS and RESULTS.

$$ The INPUTS section should include all variables that the user can change, both those given in the

case and those you choose. It should NOT include any computed cells.

$$ The RESULTS section should include only labels, cell references, Excel functions and formulas. It

should not include any input values. Your spreadsheet should show PV$/$PMT calculations and the

amortization table for the respective terms of the two borrowings. One should be able to change the

variables in the INPUTS section so that the RESULTS automatically and correctly change.

$$ Each worksheet should include student name, title and date. Each spreadsheet should be $$print ready$$

with appropriate headings appearing at the top of each page.

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