Question 23 On January 2, 2017, Crane Company wishes to issue $5000000 (par valu

Question

Question 23 On January 2, 2017, Crane Company wishes to issue $5000000 (par value) of its 6%, 10-year bonds. The bonds pay interest annually on January 1, The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Crane will realize from the sale (issuance) of the bonds. Present value of 1 at 696 for 10 periods Present value of 1 at 10% for 10 periods Present value of an ordinary annuity at 6% for 10 periods Present value of an ordinary annuity at 10% for 10 periods 0.5584 0.3855 7.3601 6.1446 O $5530130 $500000o O $3770880 $5000030 LINK TO TEXT

Explanation / Answer

Realisation of the Bonds Present Value of Principle amount 5000000*0.3855 1927500 Present value of interest amount 300000*6.1446 1843380 Total Value 3770880 Answer : 3770880

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