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ID: 2514502 • Letter: V
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View History Bookmarks Help ????5%D Sun 5:50 PM Q @ rst E of 10 Help I NEXT CALCULATOR Brief Exercise G-14 Onole company is about to issue $308,400 of 10-year bonds paying an 10% interest rate, with interest payable semiannually. The discount rate for such securities is 10%. (For calculation purposes, use S decimal places as displayed in the factor table provided.) How much can Oriole expect to receive for the sale of these bonds? (Round answer to 0 decimal places, e.g. 2,575.) Oriole can expect to receives Click if you would like to Show Work for this question: Open Show Work Study Questin tempes ot O LUSDANT ANE 0Explanation / Answer
Oriole can expect to receive = $ 3,08,403
Value for the interest payments:
= Interest (PVAF –n, i)
= $15420 (PVAF – 20 years, 5%)
= $15420 (12.4622)
= $ 1,92,167
Value of the principal amount
= FV (PVF - n, i)
= $ 308400 (PVF 20 Years, 5%)
= $308400 (0.3769)
= $ 1,16,236
The amount that Oriole can expect to receive = $ 1,92,167 + $ 1,16,236
= $ 3,08,403
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