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On January 2 2014 Wine Corporation wishes to issue $4000000 par value of its 8 10year bonds The bonds pay interest annually on January 1The market rate on such bonds

On January 2, 2014, Wine Corporation wishes to issue $4,000,000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1. The market rate on such bonds is 10%. Using the interest factors below, compute the price of bonds on the date of issuance.

Present value of 1 at 8% for 10 periods                                       0.4632

Present value of 1 at 10% for 10 periods                                     0.3855

Present value of an ordinary annuity at 8% for 10 periods          6.7101

Present value of an ordinary annuity at 10% for 10 periods        6.1446

 

Mar 21 2020 View more View Less

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