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Determine the amount of deficiency

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Q1. Ayayai Corporation, having recently issued a $20,009,700, 15-year bond issue, is committed to make annual sinking fund deposits of $608,900. The deposits are made on the last day of each year and yield a return of 10%. Determine the amount of deficiency.

Q2. Under the terms of his salary agreement, president Morgan Walters has an option of receiving either an immediate bonus of $77,000, or a deferred bonus of $98,000 payable in 10 years. Ignoring tax considerations and assuming a relevant interest rate of 4%, which form of settlement should Walters accept?

Reference no: EM132504682

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