Everhart Company issues $20,000,000, 6%, 5-year bonds dated January 1, 2014 on J

Question

Everhart Company issues $20,000,000, 6%, 5-year bonds dated January 1, 2014 on January 1, 2014. The bonds pays interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue?

7.36009

A. $20,875,236

B. $20,869,232

C. $20,000,000

D. $20,865,976

2.50% 3.00% 5.00% 6.00% Present Value of a single sum for 5 periods 0.88385 0.86261 0.78353 0.74726 Present Value of a single sum for 10 periods 0.7812 0.74409 0.61391 0.55839 Presesnt Value of an annuity for 5 periods 4.64583 4.57971 4.32948 4.21236 Present Value of an annuity for 1o periods 8.75206 8.5302 7.72173

7.36009

Explanation / Answer

Option A is Correct i.e $20,875,236

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