Valente company is about to issue 3000000 of 5-year bonds

Assignment Help Accounting Basics

Reference no: EM13573972

1.Loom, Inc. has outstanding a $1,000 face value bond with a 5% contract interest rate. The bond has 10 years remaining until maturity. If interest is paid annually, what is the value of the bond if the required rate of return is 6%?

$926.39
$1,000.00
$1,046.95
$962.39

2.What is the market value of a $1,000 bond, which has a coupon interest rate of 10% and will mature in 10 years if it is discounted at 15%? Interest is paid annually.

$876.64
$749.07
$1,000.00
$1,200.00

3.The amount you must deposit now in your savings account paying 5% interest, in order to accumulate $15,000 for your first tuition payment when you start college in 3 years is

$12,594.30.
$13,289.40.
$13,350.
$12,957.60.

4.Suppose you have a winning lottery ticket and you are given the option of accepting $7,000,000 three years from now or taking the present value of the $7,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is

$7,000,000.

$5,877,340.

$6,046,880.

$6,230,000.

5.Montz Company is considering investing in an annuity contract that will return $80,000 annually at the end of each year for 12 years. Montz has obtained the following values related to the time value of money to help in its planning process and compounded interest decisions.

Present value of 1 for 12 periods at 9%

0.35554

Future value of 1 for 12 periods at 9%

2.81267

Present value of an annuity of 1 for 12 periods at 9%

7.16073

Future value of an annuity of 1 for 12 periods at 9%

20.14072

To the closest dollar, what amount should Montz Company pay for this investment if it earns a 9% return?

$572,858

$1,185,014

$994,132

$1,611,258

6.Glover Company is about to issue $3,000,000 of 5-year bonds, with a contract rate of interest of 8%, payable semiannually. The discount rate for such securities is 10%. How much can Glover expect to receive from the sale of these bonds?

$2,768,338

$3,000,000

$3,231,660

$3,243,315

7.Valente Company is about to issue $3,000,000 of 5-year bonds, with a contract rate of interest of 10%, payable semiannually. The discount rate for such securities is 8%. How much can Valente expect to receive from the sale of these bonds?

$3,000,000

$2,768,338

$3,243,315

$3,231,660

Reference no: EM13573972

Questions Cloud

Prepare the assets section of the companys classified : zurich company recently received the following information related to the companys december 31 2012 statement of

Cash at beginning of periodcash at end of periodcash flows : norman companys income statement for the year ended december 31 2012 contained the following condensed information.

The farmer has offered to pay 20000 today or an annuity of : dr. bob jackson owns a parcel of land that a local farmer has offered to rent for the next 10 years. the farmer has

The statement of financial position for diaz company : the statement of financial position for diaz company includes the following accounts accounts receivable pound12500

Valente company is about to issue 3000000 of 5-year bonds : 1.loom inc. has outstanding a 1000 face value bond with a 5 contract interest rate. the bond has 10 years remaining

What is the difference in the proceeds to the company net : you need to choose between making a public offering and arranging a private placement. in each case the issue involves

Yu are able to buy an investment for 1000 that gives you : you are able to buy an investment for 1000 that gives you the right to receive 438 in each of the next three years.

Prepare a 12-15 slide presentation using microsoft : prepare a 12-15 slide presentation using microsoft powerpoint. in your presentation explain how families affect the

How much would you pay for an investment that provides 1000 : how much would you pay for an investment that provides 1000 at the end of the first year if your required rate of

User Account

All Pages