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KASE is in need of $465,000 to build a new prototype. Upon looking at its options, it finds it can get $465,000 in one of
KASE is in need of $465,000 to build a new prototype. Upon looking at its options, it finds it can get $465,000 in one of two ways: On 1/1/20X1, issuing a $465,000 of 4.29%, 5-year bond, dated 1/1/20X1, and must pay interest twice a year (semi-annually) every first of July and first of January On 1/1/20X1, borrowing $465,000 on a 5-year, 7% installment note payable. The terms of the note require KASE to pay 5 equal payments each December 31 for 5 years If KASE chose the option that provided the most pre-tax Income Statement profit over 5 years, what would that option's cumulative Interest Expense over 5 years be? Warning: When doing calculations, it is recommended to use Excel. If you are calculating by hand, do not round to the nearest whole number until you get to the final answer On January 1, Year 1, KASE issues $243,931 of 7%, 6-year bond, dated 1/1/20X1, and must pay interest twice a year (semi-annually) every first of July and first of January. The cumulative Bond Interest Expense through July 31, 20X3 is: Warning: When doing calculations, it is recommended to use Excel. If you are calculating by hand, do not round to the nearest whole number until you get to the final answer Enter your answer as rounded to the nearest whole number, for example: if the answer is 100, enter 100 if the answer is 100.49, enter 100 if the answer is 100.5, enter 101
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