Johnwonalotterythatwillpayhim$150,000attheendofeachofthenexttwentyyears.Assuminganappropriateinterestrateis8%compoundedannually,whatisthepresentvalueofthisamount?

A)

$1,590,540.

B)

$32,183.

C)

$1,472,723.

D)

$6,864,294.

OnJanuary2,2012,WineCorporationwishestoissue$3,000,000(parvalue)ofits8%,

10-yearbonds.ThebondspayinterestannuallyonJanuary1.Thecurrentyieldrateonsuchbondsis10%.Usingtheinterestfactorsbelow,computetheamountthatWinewillrealizefromthesale(issuance)ofthebonds.

Presentvalueof1at8%for10periods0.4632

Presentvalueof1at10%for10periods0.3855

Presentvalueofanordinaryannuityat8%for10periods6.7101

Presentvalueofanordinaryannuityat10%for106.1446periods

A)

$3,000,000

B)

$2,631,204

C)

$3,000,018

D)

$3,318,078

Themarketpriceofa$500,000,ten-year,12%(paysinterestsemiannually)bondissuesoldtoyieldaneffectiverateof10%is