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Tire Corporation is issuing $400,000 of 10%, 5-year bonds when potential bond investors want a return of 12%. Interest is payable semiannually. Present Value of

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Tire Corporation is issuing $400,000 of 10%, 5-year bonds when potential bond investors want a return of 12%. Interest is payable semiannually. Present Value of $1 Per. 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.990 0.980 0.971 0 962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.638 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0 587 6 0.942 0.837 0.888 0.790 0.746 0.705 0.666 0.535 0.630 0.596 0.564 0.507 65 623 0.583 0.547 0.513 0.482 0.452 Hea 711 2 3 4 5 6 7 8 9 10 0.900 1.970 2.941 3 902 4,853 5.795 6.728 7 652 8.566 9.471 0.000 1.942 2.884 3.808 4.713 5.601 6.472 7.325 8.162 8.983 0.971 1 913 2.829 3 717 4.580 5 417 6.230 7.020 7.786 8.530 0 962 1 886 2.775 3.630 4.452 5 242 6.002 8.733 7.435 8 111 SX 0 952 1.850 2.723 3.546 4 329 5.076 5.786 6.463 7 108 7.722 5% 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 7% 0.035 1.800 2.624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 894 99% 10 114 12% 0.926 0.917 0909 0.001 1 783 1 759 1.736 1.115 1090 2.577 2531 2.487 2.444 2.402 3.312 3240 3.170 3.102 3037 3.993 3.890 2791 3.898 3.305 4 623 4 486 4355 4.231 4.111 5.206 5.033 4.868 4 712 4 564 5.747 5.535 5.335 5.146 4.968 6 247 5 995 5.759 5.537 5328 6.710 6.418 6.145 5.889 5 650 Requirement: 1) Calculate the present value of the Principal. 2) Calculate the present value of Interest Payments. 3) What is the selling price of the bond? 4) Did the bond sell at face value, discount, or a premium? Edit View Insert Format Tools Table 12ptParagraph B I UAvev EA 2

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