you are the financial planner for Johnson Controls. Assume last year's profits were$750,000. The Board of Directors decided to forgo dividends to stockholders and retire high interest outstanding balance that were issued for years ago at a face value of $1,410,000. You have been asked to invest the profits in a bank. The board must know how much money you will need from the profit earned to return the bonds in eight years. Bank A pays 8% compounded quarterly, Bank b pays 9% compounded annually

You are the financial planner for Johnson Controls. Assume last year's profits were $750,000. The board of directors decided to forgo dividends to stockholders and retire high-interest outstanding bonds that were issued 4 years ago at a face value of $1,410,000. You have been asked to invest the profits in a bank. The board must know how much money you will need from the profits earned to retire the bonds in 8 years. Bank A pays 8% compounded quarterly, and Bank B pays 9% compounded annually (use Table 1 and Table 2 provided.) (Do not round Intermediate calculations. Round your answers to the nearest dollar amount) a-1. Which bank would you recommend? Bank A O Bank a-2. How much of the company's profit should be placed in the bank? Profit b. If you recommended that the remaining money not be distributed to stockholders but be placed in Bank B, how much would the remaining money be worth in 8 years? Future Value 00751 3505 05775 Present value interest factor of $1 per period at 1% for n periods, PVIF(.). Period 1. 5 20 25 30 35% 20 50% 50% 35% 70% 75% TROREX 9 5 % 100% 0.9950 0.9991 098520.93040 9756097099552 0.9615 0.9569 0.9524 0.9479 0.9434 0.9390 0.0345 0.930210.9259 0.92170.9178 09132 0.9091 0.9901 0.9803 0.07070 9612 0.9518 09428 09385 9246 09157 0.9070 O BOAS OR200 O BR17 08714 01653 015730 84050 1417 08:40 08254 0.9051 0.9706109583 09423 00286 09151 0 9019 83900 8763 0 8 0 8516 0961 0.27 08163 0.050 0.79330.78200772207512 0.7513 D 9020 96100 9422 0.9238 0.9060 0 BBBS 0.8714 0.8548 0.8386 0 82270 8072 0792107773 07679 0 7488 0.7350 0.7213 0.70840.8956 0 6830 0.9754 0.9515 0.923 0.0057 08839 08526 0.8420 082190 8025 075 0.765107473 0.7299 0.7430 10.00 OOO 06450 0649 06352 0 6200 09705 0.9420 0.9145 0.888008823 08375 0.3135 0700 0.7679 0 7462 0.72520 7050 08853 0 6663 0.8480 06 12 08129 05063 05801 0 5845 09657 09327090101 08708 0.8413 08131 0.750 0.7599 0.7348 07107 0.6874 0.6651 0.8435 0.6227 0.6028 05835 0564905470 05298 05132 0.9509 0.92250887 0853508207 0789407594 07307 0703206768 0.6515 06274 0 6042 0 5820 0 5507 0.5403 D 5007 50190.40 9 0958109183 0745 0836 D 8007 0.7864 07337 0.7025 06729 06446 0 51760501905674 05439 05216 05002 0.47990.46040 4418 0.4241 0.9513 09053 08617 082030781207441 07089 0675606439 08139 0 58540 505 5584 0 5327 0.5083 0.4852 0.4532 0.4423 0.4224 0.4035 0.3855 09.458 08963 08489 08043 0.7621 0.7224 0669 0549606162 0 584705549 05002 04513 04289 0.4076 0175 03385 120.9419 274 08384 0.7885 0.7435 0.7014 0 5518 0.6246 0.5897 0556805260 0 4970 0 4697 0 4440 041990 3971 3757 0.3555 0.3365 0.3186 13 09372 0.8787 0.8240 0.7730 0.7254 0.68100.68940.6006 05643 05303 0.49856468964410 04150 0.0006 03677 0346303262 0.107302097 140932508700 0.8118 0.7579 0.70770 6611 05178 5400 05051 0.472504423 041411270 12833 0.3405 10. 3191 02992 0.2807 0.2633 15 0.927908613 0.7999 0.74300690505419 05909 0 5553 $157 04810 0.441904173 038880 3624 0 33800 3152 0 2941 02745 0.2563 02394 16 09233 0.0528 0. 70 07264 0.57 0.6232 0.5767 05339 04949 042450 1935 03651 0 3307 031446291002711 | 0251002341 02176 0.91870.8444 07764 0.7142 0.6572 06050 05572 0.5134 04732 0063 040240371413423631550 292502703 0 2499 0231102138 1 0.91410.8350 0.75490 7002064120587405384 0.493504520 041550 15 10 350303219 0 2959 0 2720 0.2502 0 2300 0 2120 0.1952 0.1799 190 9096 0.8277 075361 06854 0 6255 0 5700 520004746 0 433 03957 01515370503022027550 2531 02317 0 2122 0.1945 0.1783 0.1635 200905108195 0.7425 057300 61001 05537 0 50254564 04145 03769 034270311002838 0258402354 02145 0.1956 0.1784 0.16280 1486 21 0900608114073150 650 0.5954 05375 04856 043880 3958 035890 2490 29420 2665 24150 2100 1987 0.1803 0.1637 0.1470 .1351 08961 0 6 7207 0646805309 05219 04692 04220 03797 0.3410030790277502502022570 2037 0.1899 0 1662 0150201358 01228 23 0891567954 0.710009342 05567 0.5067 0.4533 040570 3534 025 02919 02618 0234921090 1095 01703 0.1531 0.13780.1240 0 1117 24 872 07876 0.6995 0.6217 05529 0 4919 043800 3901 0 3477 031010 27670 2478220561974 1753 0.1577014121 0124 0.1123 0.1015 2508828 0.779806892 0.6095 0.5394 0.4775 04231 0 375103327029850262202330 0 207110 1842 10 1640 0 1450 0.1301 0.1160 0.1034 0.0923 25 0.3784077201057905978 0.5252 04637 04068 0350703184 0281202485 21986 1945 01722 0 1525 0.1352 0.1199 0.1064 0.0945 0.0939 27 0.8740 075440.6605059 05134 0.4502 0395003458 0304702678 023366 20740 1625 1609 14190 1252 0.1105 00976 0.0063 0.0763 28 0.9997 0.750 0.659105744 05009 04371 0 38120305 0 2010 2 0 1 0171515040.1120011590 1019 0995007090 0893 290550 0.7490 0.64940 .5631 0 4887 0 4243 0368703207 02190 0246 2117 11850 1616 14000 12200 107300919002200719 00630 3000610 0.7419 0339005521 0.4767 0.4120035630308002670 0.23140200501741 015120.131401142 00994 0.0865 0.0754 0.0557 0.0573 31 0856T073451 0.6300054121046510400003442029650298022041902 1640 14200 1228 1093 092000797 0891080000521 3205251 072736210 0510610452 033 0332502851 0344 0 201 3 1550 1130 1147 0988 00200235 034 00548 664020720105118 05702 04427 03770 0.3213 02741023400 1999 100 1452 1252 01072009190079 00677 00582 00500 00471 10.3440 0.7130 0.5020105100 043190 3560 03105 026300223901904 . 16200 13790 11751002 0095500730 00624 00534 00457 00391 083 0.7059 0,59390 5000 0.4214 0.35540300002534 0214)0 1813 0.15350 1301 011030.093700795006250 0575 00490 00417 00356 083561 699 0 4904111 0 3450 02098 024370 20500 120 450 1227 0 1035 075 074 0626 00530 00449 0.0381 0.0323 0115 0692005754 0400 40103350028000 2343 0 1962 016440 13790 1158 093 01 ODOO 0 00489 00012 003 00294 08274 0820387904712030130322 0 27000 2253 0 18 0 15600 1207 0 1092 0914007550064000300050 0001800287 08232 0.57B4 0.5595 0.4519 0 381T 0.315 0.251402165 0 1797 01491 0 12300 10010 0858001505950497 0041500347 0.0290 0.0243 08191 0.6717 0.55130452003724030660 2500 2000 1710 14200 117 000 0 00004045000383 0.0318 0.025 0.0221 08151 0 05431 04440103533 029750 2440 0.2003 0.16450 1353 0 1113 0.0012 0755 005240 05 18 0042000000029200242 00201 0811065845151041510164502900230100001574012000 10880050 0710000 1 000000325 00268 00221 0.0183 0.0370 095190.322 4200 2008 022780 1520 1507 0 1227 0 1000 00916 0. 07 10.08454 0.03850 030000248 0.02920166 05454 0.519404184 6337402724022010 17001442 0 1160 0.094 0077000628 050900415 090800275 0022000184 00151 0.76900630105117 0.410203220 26440.21.210.1712 0 13800.1113 0.00 0.0727 COBB 00476003850 0313 0.0254 00207 0.0118 00137 45 .750 0.6327 0.5042 0.402203211207020 0 13200 1060 0 620040 01490029000235 0012000154 00125 0.791006265 0.4967 0.313 0.31330 2403618 0.18 0.1263 0.1009 0.0000064 0.0518 0.041600334 0.025 0.0210 0.0174 0.0140 | 0.0113 0.6209 0.4394 03806 10.3057034200 101 01522 0 120000051 01 07650061010470099 0.00110024 00199 0015 0.0129 0.0103 1081410432037000202020500 1853 0.16 0.115700010100006750,045700383002800020000184 0.0147001170.0004 0.72030004760037150210102200 170101001102000720000543 004200 020002130189 00134 010700085 BICI te 2009 21719 2.3674 25004 2012 35039 3.3417 35425 39703 mHm 11049 Future value interest factor of $1 per period at 1% for n periods, FVIF(n). OSN1ON1520%25313540455 100101001015070200 TO 300 T0 TOTO 10100102011030210404 1050 10600 10712 1010 10020 10151 10303 1,0457 102 1070 100 1.1025 11130 11238 1107 11240 1412 102021 D4D61061410824 1.1576 117 11010 1038 126 11675 1600 1125 121551 10250 105101 1 1041 1.13141583 T 121 122 12783 10304108151003411262 1507 114 12200 1.250 1.302313401 10955 1072 1.100 1.1497 1187 12290 12723 3150 100 1 040 1 1.1265 11717 17184 12 11 16 1021 1450 13114341.105 124 1304 329 1 104 1.160512100 12801 13439 1530 1.115711770 124341 13121 3842 12 10017112601.1956 122 13449 150 15111 16010 15950 1057013811213129051375 1 164 1651 10723142512113195 1413015128 18187 1.7317 10777116101250213450 14400 1500 16750 1.000 1.9353 10011725 12010137201445 150477340 10 1 1200 1400215216 1 1 1000 4 3 1 5507 17024 1 575 2024 10994 120911827014560 15987 755 1225 220213468 14858 1635 108 109 46610 1*1164120413671151571679 1603 2.27 11160244713 7 21619151 2015 1.1216 2572 1.4004157 7545 to 22051 1 272 249714205 08 11087 202 22033 113020414500 15400 150 200 230 135 20314715734 100 21566 206 1 142 141 17000 170 22213 11499 1213 15172 17410 995 2 2879 821 9012 11550 155 15400 1.775 20464 2550 317310628 117811 20978 11 1 1672 15 1 7 2 1500 2.500 1.1730 173161031 2 2039 25751 11 117803887163451.92222258026423 2010 4 1.1841 box 106072315327319 32200 > 1.107 1.41651663019000 2373220103 3 1.1 300 17001 2000 2432520991 32503 41009 37 1202714451173482000724033 2002 35710 42081 38 208745051700021323 2.5867 3070 3.000 32000 3500 3.4607 42413 1 234228915 35845 44 2454 12201218119 1251 15648 1.0542 24370 303703781470245412 12570 158051 5 2405 3.113 3 8950 4156 60748 6 3 126427596320032563 3 1017 40119 8 7613 5010121 127051612220435 3 271 41323520567027 44 45 21 17 1779 210 192 1951 5 33 42 7 49 1278016283 2014120 50120121544511022691545171114144222 HOT W HOPE DE 11 50 120 11 16 12 1722 1522 05063 CRUCE 14 153 17.1220 2 275223.00 40 578 20 57 417 25052 229 71.1973 881015 779511970172 514 105 10 141113200 LT