Question
On January 2, 2018, Jenks Company wishes to issue $1,000,000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1.
On January 2, 2018, Jenks Company wishes to issue $1,000,000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1. The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Jenks Company will realize from the sale (issuance) of the bonds. Present value of 1 at 8% for 10 periods: 0.4632 Present value of 1 at 10% for 10 periods: 0.3855 Present value of an ordinary annuity at 8% for 10 periods: 6.7101 Present value of an ordinary annuity at 10% for 10 periods: 6.1446 Select one: Oa. $1,000,006 Ob. $1,106,026 c. $877,068 Od. $1,000,000
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