Question
Thank you. 1/ A bond issue with a face amount of $300,000 bears interest at the rate of 7%. The current market rate of interest
Thank you.
1/ A bond issue with a face amount of $300,000 bears interest at the rate of 7%. The current market rate of interest is 8%. These bonds will sell at a price that is:
Multiple Choice
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Equal to $300,000.
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More than $300,000.
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Less than $300,000.
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The answer cannot be determined from the information provided.
2/ Jagadison Co. leases computer equipment to customers under sales-type leases. The equipment has no residual value at the end of the lease and the leases do not contain purchase options. Jagadison desires a return of 8% interest on a five-year lease of equipment with a fair value of $745,976. The present value of an annuity due of $1 at 8% for five years is 4.312. What is the total amount of interest revenue that Jagadison will earn over the life of the lease? $119,024, $173,000, $298,390, $149,195.
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