On January 1, 2024, Ocean World issues $40.9 million of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium?
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- On January 1, 2021, Frontier World issues $39.3 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. Required: 1-a. If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1 decimal place. Round your final answers to the nearest whole dollar.) Bond Characteristics Amount Face amount $39,300,000 Interest payment Periods to maturity Market interest rate Issue price 1-b. The bonds will issue atmultiple choice A Discount A Premium Face amountOn January 1, 2021, Water World issues $26 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world’s largest water avalanche and the “tornado”—a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. Required: 1. If the market rate is 6%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 2. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 3. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.ok ht nces On January 1, 2024, Ocean World issues $39.1 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. Required: 1-a. If the market rate is 8%, calculate the issue price. (FV of $1. PV of $1. EVA of $1, and PVA of $1) 1-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. Req la If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in dollars not in millions (1.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.) Amount Req 1b Bond Characteristics Face amount Interest payment Number of periods Market interest rate.…
- Imagination Dragons Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 20-year zero coupon bonds with a par value of $1,000 each to raise the money. The required return on the bonds will be 11 percent. Assume semiannual compounding periods. a. What will these bonds sell for at issuance? b. Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year? c. Repeat part (b) using the straight-line method for the interest deduction.Petron needs to raise $50,000 for capital expansion of its plant. The company issues ten year bonds to raise the money. The bonds are redeemable at 102. The rate of interest on the bond, r, is 3.43% payable quarterly. If at the time of the bond issue interest rates, i, are 2.31% compounded quarterly, what amount of money will the company received from the bond issue? *On January 1, 2024, Tableau Company issues $20 million of 9% bonds, due in six years, with interest payable semiannually on June 30 and December 31 each year. Use a financial calculator or Excel. Required: 1. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 2. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 3. If the market rate is 10%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. Help Save & (Do not round intermediate calculations. Round final answer to the nearest dollar amount. Enter your answer in dollars, not in millions.) 1. The bonds issue at 2. The bonds issue at 3. The bonds issue at and the issue price is and the issue price is and the issue price is
- To raise capital for an expansion project, Pegasus Motors Corporation issued P5000.00, 8% bonds. The bonds will mature in 15 years with interest paid every three months. If an investor purchased 12 certificates for P48, 000.00. Determine: a) the total quarterly receipts due; b) the current yield of the bond. (Ans. P1200.00; 10%)Supper Accountants Inc plans to sell a bond to finance its plant. The face value of the bond is $100,000 and it will be due in 5 years. The bond is offered at 6% annual interest rate, although the market rate is 7%. Supper Accountants is expected to receive $95,900 in cash when the sales is completed. How much interest expense should Supper Accountants record for the first year? 6,000 5,754 7,000 6.173Atari needs $4.5 million in new investment capital to develop and market downloadable game software for its new GPS2-ZX system. The plan is to sell $10,000 face-value corporate bonds at a discount of $9000 now. A bond pays a dividend each 6 months based on a bond interest rate of 5% per year with the $10,000 face value returned after 20 years. Will a purchase make at least 6% per year compounded semiannually?
- On November 10, 2022, the total market value of company “BellaLimited” is $49 million dollars. In the beginning of the year, the company issued a ten-year bond with a coupon rate of 12% that iscurrently trading at 1,125 dollars. The market ongoing rate ofinterest/discount rate is 8%. The CEO of the company isconsidering undertaking two solar projects namely, project“Lambda” that has a cost of $15,000 and is expected to producebenefits (e.g., cash flows) of $5,000 per year for five years andproject “EPSILON” that costs $24,000 and is expected to produce cash flows of $6,500 per year for five years. a. Calculate the two projects Internal Rate of Return and ProfitabilityIndices. b. Which project would be selected, assuming that are MutuallyExclusive, using each ranking method? c. Discuss in detail the advantages and disadvantages of the IRRcriterion. d. Which ranking criterion is better IRR or NPV? Carefully explainyour answer.Massers Company is issuing long-term bonds to raise money for a planned acquisition. The face value of the bonds is $10,000,000. The stated interest rate is 8% payable semiannually for the 10-year term. The current market rate for similar bonds is 10%. What amount of proceeds will Massers receive from this bond issue? If needed, you can access the interest tables here. $10,000,000 $8,753,779 $11,359,065 $11,951,190More info Wonder Wilderness Company plans to raise the capital by issuing $400,000 of 8%, five-year bonds on January 2, 2020. The bonds pay interest semiannually on June 30 and December 31. The company receives $398,100 when the bonds are issued. The company also issues a mortgage payable for $650,000 on January 2, 2020. The proceeds from the mortgage will be used to construct the new building. The mortgage requires annual payments of $65,000 plus interest for ten years, payable on December 31. The mortgage interest rate is 9%.