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Problem Two (4 points) On January 1, 2023 Alpha Company issued $25,000,000 of bonds payable. Alpha is required to make annual cash deposits of $1,800,000
Problem Two (4 points) On January 1, 2023 Alpha Company issued $25,000,000 of bonds payable. Alpha is required to make annual cash deposits of $1,800,000 into a trust fund to accumulate cash to retire the bonds at the end of 10 years. Accordingly, on the last day of each year, for 10 years, Alpha will deposit $1,800,000 into the fund. Alpha's treasurer states the trust will earn 5% interest income each year. Required: 1. What will the trust fund balance be at the end of 10 years? 2. Assume that given the facts stated above, the trust fund will not have $25,000,000 at the end of 10 years. Given that, how much should Alpha invest into the trust fund at the end of each year, for 10 years at 5% in order to have $25,000,000 at the end of 10 years
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