Question

22. On January 1, 2021, Anne Teak Furniture issued $100,000 of 10% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 13 years. The annual market rate for bonds of Similar risk and maturity is 12%. What was the issue price of the bonds? (EV of S1, PV of S1, EVA of $1. PVA of $1. EVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $50,105 $88,857 $93,857 $86,997. 23. Air Destinations issues bonds due in 12 years with a stated interest rate of 11% and a face value of $400,000 Interest payments are made semi-annually. The market rate for this type of bond is 12%. Using present value tables, calculate the issue price of the bonds. (FV of $1. PV of $1. EVA of SI. PVA of $1. EVAD of S1 and PVAD of S1) (Use appropriate factor(s) from the tables provided) Multiple Choice $425,100 $238,948 $374,900 $400,000 24. Green Industries purchased a machine from Cyan Corporation on October 1, 2021. In payment for the $141,000 purchase, Green issued a one-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. Monthly installment payments are closest to: (FV of $1. PV of si FVA of $1. PVA of S1, FVAD of S1 and PVAD of $1) (Use appropriate factor(s) from the tables provided) Multiple Choice $16,920 $12,528 $11,750 $13.600

Answer 1

22)
	Computation Of Bond Price
	a	Semi-annual Interest Amount	$         5,000.00
		($100000*10%/2)
	b	PV Annuity Factor for (26 Years,6%)	13.0032
	c	Present Value Of Annual Interest (a*b)	$       65,015.83
	d	Redemption Value	$   1,00,000.00
	e	PV Factor Of (26 Years,6%)	0.21981
	g	Present Value Of Redemption Amount (d*e)	$       21,981.00
	f	Intrinsic Value ( Price ) Of The Bond (c+g)	$       86,996.83
		Correct Option : LAST
23)
	Computation Of Bond Price
	a	Semi-annual Interest Amount	$       22,000.00
		($400000*11%/2)
	b	PV Annuity Factor for (24 Years,6%)	12.5504
	c	Present Value Of Annual Interest (a*b)	$   2,76,107.87
	d	Redemption Value	$   4,00,000.00
	e	PV Factor Of (24 Years,6%)	0.24698
	g	Present Value Of Redemption Amount (d*e)	$       98,791.42
	f	Intrinsic Value ( Price ) Of The Bond (c+g)	$   3,74,899.28
		Correct Option:THIRD
24)	EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
	Where,
	EMI= Equal Monthly Payment
	P= Loan Amount
	R= Interest rate per period
	N= Number of periods
	= [ $141000x0.01 x (1+0.01)^12]/[(1+0.01)^12 -1]
	= [ $1410( 1.01 )^12] / [(1.01 )^12 -1
	=$12528
	Correct Option: SECOND