Managerial accounting
1.Sunland Company is about to issue $390000 of 10-year bonds paying an 12% interest rate, with interest payable annually. The discount rate for such securities is 11%.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
In this case, how much can Sunland expect to receive from the sale of these bonds? (Round answer to 0 decimal places, e.g. 2,575.)
Sunland can expect to receive
$enter a dollar amount to be recieved rounded to 0 decimal places
2. Crane Company issued $1,120,000, 13-year bonds. It agreed to make annual deposits of $90,000 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 13 years. The deposits are made at the end of each year into an account paying 6% annual interest.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What amount will be in the sinking fund at the end of 10 years? (Round answer to 2 decimal places, e.g. 25.75.)
Amount in the sinking fund
$enter a dollar amount rounded to 2 decimal places
3. Joseph and Margaret Garfield invested $8000 in a savings account paying 7% annual interest when their daughter, Angela, was born. They also deposited $1,300 on each of her birthdays until she was 14 (including her 16th birthday).
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
How much was in the savings account on her 16th birthday (after the last deposit)? (Round answer to 2 decimal places, e.g. 25.25.)
4. (a) What is the present value of $27,000 due 15 periods from now, discounted at 5%? (Round answer to 2 decimal places, e.g. 25.25.)
Present value
$enter a dollar amount rounded to 2 decimal places
(b) What is the present value of $27,000 to be received at the end of each of 11 periods, discounted at 10%? (Round answer to 2 decimal places, e.g. 25.25.)
Present value
$enter a dollar amount rounded to 2 decimal places
5.