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Assume that Northern Petroleum Inc. Issued the following bond on January 1: Face amount: $400,000 Contract interest rate: 10% Effective interest rate: 10% Interest is
Assume that Northern Petroleum Inc. Issued the following bond on January 1: Face amount: $400,000 Contract interest rate: 10% Effective interest rate: 10% Interest is paid semiannually on January 1 and July 1 Term of bond: 5 years Based on this information, what is the present value of the periodic interest to be paid on the bonds? Refer the present value tables in Exhibit 5 and Exhibit 7. a. $154,435 b. $194,435 c. $40,000 d. $200,000
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