Exercise 6-13 Coronado Inc. manufactures cycling equipment. Recently, the vice p

Question

Exercise 6-13 Coronado Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,088,700 of 7% term corporate bonds on March 1, 2017, due on March 1, 2032, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2017. At the time of issuance, the market interest rate for similar financial instruments is 12% Click here to view factor tables As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Selling price of the bonds $ Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Amount PV factor Present value Interest 108104.5 13.76483 1488040 Principal 3088700 0.17411 537774 Selling price 2025814 Selling price of the bonds = 2025814 Note: Final answer might vary + 1

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