Pearl Inc evaluation of the request, the board of directors has decided to raise
ID: 2514419 • Letter: P
Question
Pearl Inc evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,205,500 of uction of a new plant to meet the increasing 1, 2017, due on March 1, 2032, with interest payable each March nterest rate for snilar financial instruments is 12%. As the coetroller of the company, determine the selling price of the bonds. (Round factor values to S decimal places e.g. 1.25124 and By accessing this Question Assistance, you will learn while you earn points based on the Point Potenitial Policy set by your instructor. Question Attempts: O of 1 used s Peints a 0Explanation / Answer
The selling price of the bonds = $27,64,231
Value for the interest payments:
= Interest (PVF – OAn, i)
= $1,60,275 (PVF – OA30, 6%)
= $1,60,275 (13.7648)
= $22,06,153
Value of the principal amount
= FV (PVFn, i)
= $32,05,500 (PVF30, 6%)
= $32,05,500 (0.1741)
= $5,58,078
The selling price of the bonds = $22,06,153 + $5,58,078 = $27,64,231
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