Check my w The Landers Corporation needs to raise $1.90 million of debt on a 20-year issue. If it places the bonds privately, the interest rate w be 12 percent. Forty thousand dollars in out-of-pocket costs will be incurred. For a public issue, the interest rate will be 11 percent, and the underwriting spread will be 4 percent There will be $140.000 in out-of-pocket costs. Assume interest on the debt is paid semiannually, and the debt will be outstanding for the full 20-year period, at which time it will be repaid Use Appendix B and Appendi for an approximate answer but calculate your final answer using the formula and financial calculator methods a. For each plan, compare the net amount of funds initially available inflow-to the present value of future payments of interest and principal to determine net present value. Assume the stated discount rate is 14 percent annually Use 700 percent semiannual throughout the analysis (Disregard taxes.) (Assume the $1.90 million needed includes the underwriting costs. Input your present value of future payments answers as negative values. Do not round intermediate calculations and round your answers to 2 decimal places.) Private Placement Public Issue Nel amount to Landons Proson value of future payments Net present value $ 0.00 $ Prix 1 of 3 ll Next > AP Appendix Present value of $t, PV, P V- Period .... 1% 0.990 090 0971 0961 0.951 0.942 0933 0.923 0.914 0905 0096 2% 0. 90 0961 0.942 0924 906 0.888 0971 0.853 0837 820 0.014 0788 0.773 0758 0743 0.72 3% 0.971 0943 0915 0.888 0.863 0.837 0.813 0.789 0.766 0744 0.722 0.701 0.01 0.661 0.642 0.623 0.605 0.587 0.570 0.556 0471 0412 0307 0 28 Percent 4% 5% 6% 7% 0.962 0.952 0.943 0 935 0.925 0907 0990 0.873 9901660840 0816 0.855 0.823 0792 0.763 0.822 0.784 0.747 0.713 0.750 0746 0.705 0666 0.750 0.711 0.655 0.623 0731 0.627 0582 0.703 0.545 0.592 0544 0676 114 0558 508 0650 0.527 0.625 0.557 0497 0444 0.601 0415 0577 0388 0595 0.481 0417 0.362 0534 0339 0513 04:16 0.494 0416 350 0475 396 276 0331 0277 0.456 0377 0.375 0295 023 0.308 0.231 0.13 0.20 0.142 0097 0.141 OOBY 0054 0.034 8% 9% 10% 11% 12% 0.926 0917 0.000 0.901 0893 0857 0.8420826 0812 0797 0794 0720751 0.731 0.712 0.735 0.709 0.583 0.659 0.636 0 650 0621 0.593 0567 0630 0.595 0.554 0.535 0.507 0593 0513 0.452 0502 0.467 0.434 0404 0.500 0.460 0.4 0391 0.361 0386 0.72 0.322 0.38 0.250 0317 027 0 197 0 356 0313 0.286 0.257 O 02900258 022 0340 0.299 0.263 0.205 0.315 0275 023 0209 0.183 0.792 0270 0.198 0 0 0.166 0.250 0.212 180 0.153 023) 0194 164 0 0.17 0215 0.16 0104 0.124 0.116 0.116 0.092 0074 005 0.075 0044 0057 0.098 0.033 0015003 0022 0.021 0.013 000 0005 0003 9.879 0970 0820 0.750 0696 0.673 0.610 0552 0453 0372 0.742 0608 Appendix concluded Present value of $1 Period 13% 0.885 0.73 0.613 0.543 0.480 0425 0.375 0.3 0.295 0.261 0.231 0.204 0.18 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 50% 08770870 0.362 0.8550847 0.840 03 0800 0.769 074 0714 0.667 0.769 0.116 0.743 0731 0.7180 106 0.69 0.660 059 0549 0510 0.444 0.675 068 0.641 0.624 05790.512 0455 0405 0.364 0.296 092 0.572 0552 0.534 0.499 0.482 0.490 0.350 0.30 0.250 0198 0.519 0497 01:47 0419 0.402 0.328 0.269 0223 0.186 0.132 456 0.432 0.410 0390 0.370 0.352 0335 0.262 0207 0.165 0.11 OOR 0.400 0.375 0.354 0333 0314 0.796 0279 021001590122 0095 0.35 327 0.305 0285 0212400. 00 122 QOR QO 0.308 0.284 0.263 024 025 0209 0.194 OM 0094 067 0040 0.20 0.247 0227 0.20 0.19 0.16 0.162 0.107 0073 0.050 0.035 0017 0237 0.215 0.195 0.17 0.162 014 01 0006 0056 0037 0.025 0.012 0.200 0.17 0.163 0.1820.163 0.145 0.1300.516 0.104 0. 0 0 055 0.003 002000130.005 0.160 .141 0.125 0.111 0000 000 007 0 044 0025 0,015 0,009 0.003 01230 0.65 000078 00650 0020 DO 0 0002 0.123 0 107 00920081 071 0.062 0054 0028 015 000 0005 0.002 0.08 0.093 000000 0 0000052 0045 0.023 0012 00 0 0 0.009 0059 0051 0044 0380018 0.000 0005 0.002 0.001 OOR3 0070 000 051 0043 0.037 0011 0014 0.007 0.001 0.002 0 0073 0061 0.0151 004 003 00110.025 0.012 000 0002 0001 0 00110000 0024 0020 016 0013 0010 0004 0.00 0.00 0 0 0.02000150012 0009 01007 0005 004 000 0 0 0 0.003 0000 0001 0.005 0.002 0.001 0.004 0 0 0 0 0001 0 0.00+ 0.001 0 0 0 0 0 0 0 0 0.141 0.125 0111 0.00 DOBY 0047 0. 06 0.008 0.002 Appendix D Present blue of an any of S1, P P VA- 07 90909010 0943 1833 2,673 3.465 4212 0935 1808 2624 3387 4100 4767 3312 1993 4623 5206 5582 6802 5971 6515 7024 3% 4% 5% 0.990 0980 0.97 0.92 0.952 1.970 1.942 1913 1006 1859 2941 28842829 2725 2723 3902 3908 3717 3630 4.853 4713 4.500 4.452 4179 5.795 5601 5.417 5242 5076 6728 6.472 6230 6.002 7.652 735 7020 6733 8.566 162 7786 74357.100 9.471 383 8530 L111 7.722 1036 9. 77 0.253 8.760 9385 10.635 9.96 13004 12.106 11.296 10563 13865 12.849 1.9381 .118 10:30 14.718 13.578 12.561 11652 15.562 14.292 13.166 12.166 1 374 16.390 14992 13.754 +2659 1690 17.226 15.678 4324 13.134 12.085 18.046 1635 14.87713.590 12852 2023 1952 17617 15 1 4004 25 22396 13600 37.292 15.372 32.35 27.395 23.115 19.791 17150 39.10631474 2573021.42 1.256 1.759 1736 1713 1690 2.531 2487 2444 7402 240 170 3102 3 290 291 3.696 3.605 4.4064.355 4231 4111 503 4868 4.212 4564 5.535 5135 5.146 4.958 5995 5.759 5537 5.128 6 .145 5.889 5650 6.05 6.495 6207 59018 7.161814 5492194 7487 2.103 6.750 6.424 786 736769026628 061 7.606 7191 811 3 13 7.824 7.379 6974 8.544 8.022 75497120 3.756 301 7702 7250 834 9954 10575 5.247 6710 6 7.139 7536 7904 244 8559 8851 9122 372 754 8351 8.745 9.295 9712 0.106 10477 10.828 11.158 11470 12 R 13765 5046 5.762 9447 9763 10059 10.336 10.598 1654 12.409 13.112 17.801 9.13 1665 11.258 1125 12.233 9.129 928 0.274 0757 0,962 8.514 9097 9.427 779 315 79637459 422 743 86 891 8.744 5042 304 2/2 Appendix concluded Present value of an y 0885 1.668 2361 2:974 3.517 3.998 4.423 4.799 5.132 5.687 5.918 6122 6.302 6.462 6504 6.729 6.840 6939 7.075 7330 7496 14% 15% 16% 17% 18% % 20% 25% 30% 35% 0.1377 0.870 0.362 0.855 0.847 1140 11 1 0 .100 7 0.741 0714 1647 1,626 1605 155 156 157 1521 140 136 289 224 1.111 2.322 2283 2246 2210 174 1952 1916 1676 1589 2.914 2955 276 2143 2.600 2.639 2509 2352 2.166 997 249 1605 3.433 352 374 3.199 1127 1058 2991 249 2635 20 2035 1737 2.889 3.784 3 685 3.589 1498 3410 26 2951 2641 2115 2158 4.25 4.1604 099 1322 812 1706 3.505 3.161 202 2.508 2.2011 463 487 4444207 401954 17 3.329 2.925 2.50 2331 4,346 4.772 4 DOT 4.451 4303 4163 40 3463 3019 2.665 2.929 1928 5216 5019 4.833 4.659 4.494 439 4192 3.571 3. 02 2.715 2414 5453 5.234 5021 48364656 446 4.3223656 11472752 2438 977 5.660 5421 5197 4988 479 4511 4.439 2.725 10 2 .770 3.456 5.342 5583 5.342 511 4910 4715 4533 3.750 1.223 2.90 3.459 .990 002 5.724 5.463 5229 5008 4102 4.611 6.142 5.347 5.575 5 124 5092 493 4.679 859 3.268 2825 2.484 1.995 6.255 5.954 S. 5405 5462 493 4.730 387 3283 2834 2.489 997 6.373 6047 5749 5475 5222 989 4.725 3910 3.295 2840 2.492 1998 6.467 6.128 5.818 5534 522 503) 4112 1901 1304 2544 2494 1990 6.5506.199592 554 5316 5020 4.84 33112840 2096 5.623 6.259 5929 562B 5353 5.10+ 4.870 29543 216 ZMO 2.497 1.000 68735.656 6 0975766467 5.195 4961.05 329 2000 28562699 6.177 51205517 70035566 5.235 4929 995 23 57 7500 2.000 2105 6642 6.233 5871 5548 528 4907 1909 3333 2.857 2000 2500 66616 246 SARO 7.133 554 5262 495 4,000 13 2857 2.500 7.675