Business, 19.03.2020 23:29 annaebrown9737

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar)

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Answer from: iliketurtures

If the market rate for this type of bond is 8%. The issue price of the bond is $186,409.7.

Issue price of bond

Price=$200,000×PVAF[(8%÷2)^10×2] +$200,000×PVF[(8%÷2)^10×2]

Price=200,000×7%÷2×[1-(1+8%÷2)^-10×2÷8%÷2] +200,000×1÷(1+8%÷2)^10×2

Price=$7,000×[1-(1+0.04)^-20÷0.04] +$200,000×1÷(1+0.04)^20

Price=$7,000× [1-1÷(1.04)^20÷0.04]+$200,000×1÷(1.04)^20

Price=$7,000×(1-0.45638695/0.04)+$200,000×0.45638695

Price=$7,000×0.543613054/0.04+$91,277.39

Price=$95,132.28+$91,277.39

Price=$186,409.67

Price=$186,409.7 (Approximately)

Inconclusion the issue price of the bond is $186,409.7.

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Answer from: idontknowwhyiam

$186,409.7

Explanation:

The computation of the issue price of the bond is shown below:

Cash flows Amount PVF Present value

Semi annual Interest $,700013.59033$95.132.31

Maturity value $200,0000.456387$91,277.4

Price of bonds $186,409.7

The number of years is 20

And, the rate of interest is 4%

And please refer to the present value factor table

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

Answer from: Quest

Its stage conventional

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Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value...

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