How would your answer change if the bonds were due

Assignment Help Financial Accounting

Reference no: EM13914105

The state of Idaho needs to raise $50,000,000 for highway repairs. Officials are considering issuing zero coupon bonds, which do not require periodic interest pay- ments. The current market interest rate for the bonds is 10 percent. What face value of bonds must be issued to raise the needed funds, assuming the bonds will be due in 30 years and compounded annually? How would your answer change if the bonds were due in 50 years? How would both answers change if the market interest rate were 8 percent instead of 10 percent?

Reference no: EM13914105

Questions Cloud

Build a graphical representation of a web-based input : build a graphical representation of a Web-based input for making a hotel reservation

Martins report : The Martins file a joint return. Their AGI is $367,050. The Martins report the following amounts on Schedule A: home mortgage interest, $12,920; real estate taxes, $5,100; and $7,000 of cash gifts to qualified charities

Capital expenditure : Betterments are a type of capital expenditure

What are some of the challenges scion currently faces : What are some of the challenges Scion CURRENTLY faces as their brand has grown? How can they continue to reach young people and what media outlets should they be using?

How would your answer change if the bonds were due : How would your answer change if the bonds were due in 50 years? How would both answers change if the market interest rate were 8 percent instead of 10 percent?

Balance sheet expenditures : Revenue expenditures are also called balance sheet expenditures.

What strategic changes will netflix have to make to remain : From a supply chain perspective, Netflix will always be somewhat vulnerable because it does not own/control the source of supply (movies). How can Netflix insulate itself from this threat to its existence?

How much cash is received and how much is bonds payable : How much cash is received? How much is Bonds Payable? What is the difference between a and b called and how much is it?

Expenditures extending : Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate

User Account

All Pages