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Need help with 1a and 1b On January 1, 2024, Water World issues $25.5 million of 5% bonds, due in 15 years, with interest payable
Need help with 1a and 1b
On January 1, 2024, Water World issues $25.5 million of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. Required: 1-a. If the market rate is 4%, calculate the issue price. (FV of $1,PV of $1,FVA of $1, and PVA of $1 ) 1-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. If the market rate is 4%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1 ) (Note: Use tables, Excel, or a financial calculator. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.)Step by Step Solution
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