Homework Answers
Correct answer------------$11,900
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The cash flow from operations for the above transaction will be interest payment on bonds. The cash paid for interest will be $ 11900 calculated as 170000 x 7%.
The interest expense will be different than cash paid for interest but the amount shown in cash flow as outflow will remain same as $11900 which is cash interest on bonds.
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interest of 10.00%, and a 10-year term to maturity. Weller uses the
effective interest method to amortize bond discounts and premiums.
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