Adams Ltd is contemplating issuing ten-year $30,000 face value debentures, which, under present conditions, would yield an effective annual interest rate of 6%. The debentures would pay interest semi-annually at an annual interest rate of 4%. 1) Discuss how much cash Adams Ltd should receive on the date of issue, showing your calculations. 2) Is the annualized cost to Adams Ltd greater than, less than or equal to the contract rate of 4%? Explain why. Your answer should not exceed 50 words. Calculations can be in addition to these 50 words. Format your answer by copying and pasting the following bold face into the answer box provided; however, please do not use bold face in your answer itself. 1) How much cash should Adams Ltd receive on the date of issue: 2) Is the annualized cost to Adams Ltd greater than, less than or equal to the contract rate of 4%? Explain why. Table B - (annuity) Present value of $1 per period for n periods 1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 15% 16% 18% 20% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.870 0.862 0.847 0.833 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.626 1.605 1.566 1.528 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.283 2.246 2.174 2.106 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.855 2.798 2.690 2.589 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.352 3.274 3.127 2.991 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.784 3.685 3.498 3.326 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.160 4.039 3.812 3.605 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.487 4.344 4.078 3.837 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.772 4.607 4.303 4.031 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 5.019 4.833 4.494 4.192 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.234 5.029 4.656 4.327 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.421 5.197 4.793 4.439 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.583 5.342 4.910 4.533 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6.002 5.724 5.468 5.008 4.611 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.847 5.575 5.092 4.675 16 14.718 13.578 12.561 11.652 10.838 10.106 8.851 7.824 6.974 6.265 5.954 5.668 5.162 4.730 17 15.562 14.292 13.166 12.166 11.274 10.477 9.122 8.022 7.120 6.373 6.047 5.749 5.222 4.775 18 16.398 14.992 13.754 12.659 11.690 10.828 9.372 8.2017.250 6.467 6.128 5.818 5.273 4.812 19 17.226 15.678 14.324 13.134 12.085 11.158 9.604 8.365 7.366 6.550 6.198 5.877 5.316 4.843 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 6.623 6.259 5.929 5.353 4.870 21 18.857 17.011 15.415 14.029 12.821 11.764 10.017 8.649 7.562 6.687 6.312 5.973 5.384 4.891 22 19.660 17.658 15.937 14.451 13.163 12.042 10.201 8.772 7.645 6.743 6.359 6.011 5.410 4.909 23 20.456 18.292 16.444 14.857 13.489 12.303 10.371 8.883 7.718 6.792 6.399 6.044 5.432 4.925 24 21.243 18.914 16.936 15.247 13.799 12.550 10.529 8.985 7.784 6.835 6.434 6.073 5.451 4.937 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.464 6.097 5.467 4.948 Present value tables Table A - Present value of $1 payable after n periods 5% RT 2% 3% 8% 10% 12% 14% 15% 16% 18% 20% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.870 0.862 0.847 0.833 2 0.980 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.756 0.743 0.718 0.694 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.658 0.641 0.609 0.579 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.572 0.552 0.516 0.482 5 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.497 0.476 0.437 0.402 6 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.432 0.410 0.370 0.335 7 0.933 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.376 0.354 0.314 0.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.327 0.305 0.266 0.233 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.284 0.263 0.225 0.194 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.247 0.227 0.191 0.162 11 0.896 0.804 0.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.215 0.195 0.162 0.135 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.187 0.168 0.137 0.112 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.163 0.145 0.116 0.093 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.141 0.125 0.099 0.078 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.123 0.108 0.084 0.065 16 0.853 0.728 0.623 0.534 0.458 0.394 0.292 0.218 0.163 0.123 0.107 0.093 0.071 0.054 17 0.844 0.714 0.605 0.513 0.436 0.371 0.270 0.198 0.146 0.108 0.093 0.080 0.060 0.045 18 0.836 0.700 0.587 0.494 0.416 0.350 0.250 0.180 0.130 0.095 0.081 0.069 0.051 0.038 19 0.828 0.686 0.570 0.475 0.396 0.331 0.232 0.164 0.116 0.083 0.070 0.060 0.043 0.031 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.061 0.051 0.037 0.026 21 0.811 0.660 0.538 0.439 0.359 0.294 0.199 0.135 0.093 0.064 0.053 0.044 0.031 0.022 22 0.803 0.647 0.522 0.422 0.342 0.278 0.184 0.123 0.083 0.056 0.046 0.038 0.026 0.018 23 0.795 0.634 0.507 0.406 0.326 0.262 0.170 0.112 0.074 0.049 0.040 0.033 0.022 0.015 24 0.788 0.622 0.492 0.390 0.310 0.247 0.158 0.102 0.066 0.043 0.035 0.028 0.019 0.013 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.030 0.024 0.016 0.010