Jasper will call and retire all outstanding 6% subordinated debentures (callable at 104). Given the present interest rate of 5% on similar debt, it is expected that the debentures will require the full call premium. A rise in market interest rates to 6% would reduce the loss on bond retirement from the projected $75,000 to $65,000.

As Holt proceeded with the work, she indicated uneasiness about certain gures and conclusions but said she would take the clients word about the validity of some entries since the review was primarily for internal use and was not an audit.

(*) Jasper intends to sell certain real estate and facilities held by the Assembly Division at an after-tax prot of $935,000. The proceeds of this sale will be used to retire outstanding debt.

1. Determine the cost and tax basis of the land:

2. Determine the market value of the real estate:

3. Determine the authorization responsibility for use of the proceeds:

4. Determine the after-tax profit and proceeds: