Advanced Placement (AP) College

On January 1, 2021, Frontier World issues $40.0 million of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 3-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1 decimal place. Round your final answers to the nearest whole dollar.)

Answers

Answer 1
To calculate the issue price of the bonds, we need to use the present value formula and the appropriate factor(s) from the tables provided. Here are the steps:

1. Determine the number of periods. Since the bonds have a maturity of 15 years and interest is payable semiannually, there will be 30 periods (15 years * 2 periods per year).

2. Determine the periodic interest rate. The market rate is given as 9%. Since interest is payable semiannually, the periodic interest rate is half of the annual rate, which is 4.5% (9% / 2).

3. Calculate the present value of the interest payments. The bonds have a coupon rate of 8%, which is applied to the face value of $40.0 million. The interest payments are semiannual, so we need to divide the coupon rate by 2. Using the Present Value of an Ordinary Annuity (PVA) table, find the factor for 30 periods and a periodic interest rate of 4.5%. The factor is 13.218. Multiply this factor by the semiannual interest payment of $40.0 million * 8% / 2 = $1.6 million. The present value of the interest payments is $21.148 million ($1.6 million * 13.218).

4. Calculate the present value of the principal payment. To calculate the present value of the principal, we need to use the Present Value of a Single Amount (PV) table. Find the factor for 30 periods and a periodic interest rate of 4.5%. The factor is 0.335. Multiply this factor by the face value of $40.0 million to get the present value of the principal payment, which is $13.4 million ($40.0 million * 0.335).

5. Calculate the issue price. The issue price is the sum of the present value of the interest payments and the present value of the principal payment. Add $21.148 million and $13.4 million to get the issue price, which is $34.548 million.

Therefore, the issue price of the bonds is $34.548 million.

Related Questions

why are companies turning to the world of sports to meet their promotional needs? How do companies decide which team or individual athletes they should use. Create a list of 10 ideas​

Answers

Answer:

Companies are turning to the world of sports to meet their promotional needs because sports have a large and passionate fan base, and sponsoring a team or athlete can help companies reach a wider audience and increase brand awareness. Here are 10 ideas for how companies might decide which team or individual athletes to use for their promotions:

Choose a team or athlete that aligns with the company’s values and brand image.

Consider the popularity and reach of the team or athlete, both locally and globally.

Look at the demographics of the team or athlete’s fan base to see if it matches the company’s target audience.

Evaluate the team or athlete’s performance and potential for future success.

Consider the cost of sponsorship and whether it fits within the company’s budget.

Look at the team or athlete’s social media presence and engagement with fans.

Consider any existing partnerships or sponsorships that the team or athlete may have.

Evaluate the potential for co-branded merchandise or promotional materials.

Consider the potential for cross-promotion with other sponsors or partners.

Look at the potential for long-term partnerships and opportunities for future collaboration.

Explanation:

Choose the answer that best completes the visual analogy.

Answers

Answer: "Look at attachment"

Explanation:

If we look at the second representation of the first visual analogy, we see that the star is in the middle of the white circle and is black. Therefore, for the second representation of the second analogy, the circle must be black and in the middle like the black star.

The answer that best completes the visual analogy is option C.

What is the best visual analogy?

The answer that ebst completes the visual analogy must be one that follows the same principles as the ones in the first instance. In the first instance, we can see that the star is now in the middle of the circle and is also a dark color.

The second circle is white and the outermost one is dark. Only the third option matches this depiction.

Learn more about analogies here:

https://brainly.com/question/1490242

#SPJ1

Other Questions
Prove the following: (i) If gcd(a,b)=1 and ca, then gcd(b,c)=1 (ii) If gcd(a,b)=1 then gcd(ac,b)=gcd(c,b) (iii) If gcd(a,b)=1 and c(a+b), then gcd(a,c)=gcd(b,c)=1 (iv) If gcd(a,b)=1,dac and dbc, then dc, Type the correct answer in each box. Use numerals instead of words. If necessary, use / for the fraction bar(s).The slope of the line shown in the graph is _____and the y-intercept of the line is _____ . Sess New Buko.3 sen teken Wing Staffiness Method WA001 2x Ow Capability Map, Value Stream and ArchiMate Modelling (EnterpriseArchitecture)To create an enterprise architecture describing a servicedelivery business and IT systems, based on a background of anA- Case study: The Department of Human Services. Task 1: Business architecture in developing a characterisation of what an organisation does, through business capability models, and high-level process Do-WhileDescription:In this activity you will learn how to use a do-while loop. You will be printing 20 to 1. Please follow the steps below:Steps:Create a do-while loop that prints out the numbers from 20 - 1. You can declare an int variable before the do-while loopTest:Use the test provided.Sample output:2019181716151413121110987654321code:class Main {public static void main(String[] args) {// 1. Create a do-while loop that prints out the numbers from 20 - 1. You can intitalize an int variable before the do-while loop} Do you find constructivism a useful approach forthinking about world politics? Why, or why not? Please help A catalyst pellet with a diameter of 5 mm is to be fluidizedwith 45,000 kg/hr of air at 1 atm and 77oC in a vertical cylinder.Particle density = 960 kg/m3 and sphericity = 0.6. If the quantityof ai Q1g9) Explain how a centrifugal pump and a gear pump work and how this difference leads to different consequences when each type of pump is deadheaded i.e. the pump is set to pump into a closed system. A 1 Mbit/s data signal is transmitted using quadrature phase shift keying (QPSK) and you know that a 5 dB signal to noise ratio provides adequate quality of service. A receiver with a 2 dB noise figure is available and a 20 dBm transmitter will be used. A 10 dBi circularly polarized transmit antenna will be used and the mobile receiver will use a quarter wave monopole antenna. Estimate the maximum range of transmission assuming free space propagation at 2.4 GHz. (10 marks) Ammonia is absorbed from air into water at atmospheric pressure and 20C. Gas resistance film is estimated to be 1 mm thick. If ammonia diffusivity in air is 0.20 cm/sec and the partial pressure is Find the surface area of revolution about the x-axis of the graph of y=(4-x^2/3) 3/2, 0x8. TRUE / FALSE."A bill must first be introduced by a state legislature to eitherchamber. What is the price of a 3 -year bond with a 8% coupon rate and face value of $100 ? The bond is trading at a yield of 8%. Coupons are paid semi-annually. Assume semi-annual compounding. Round your answer to the nearest cent ( 2 decimal places). Use the definition of the derivative to find the slope of the tangent line to the graph of the given function at any point. Show your work by completing the four-step process. (Simplify your answers completely for each step.) f(x) = 4x + 7x Step 1: Step 2: Step 3: Step 4: f'(x) = lim h0 f(x + h) = 4(x + h) +7(x+h) f(x + h)-f(x) = h(4(2x+h)+7) f(x + h) f(x) = h f(x+h)-f(x) h 4(2x+h) +7 8x + 7 X X (Expand your answer completely.) (Factor your answer completely.)Let f(x) = x + 5x. (a) Find the derivative f' off by using the definition of the derivative. Show your work by completing the four-step process. (Simplify your answers completely for each step.) f(x + h) = (x + h) +5(x+h) (b) Step 1: Step 2: Step 3: Step 4: f'(x) = _lim_ h0 f(x +h)-f(x) = f(x+h)-f(x) h f(x +h)-f(x) h (Expand your answer completely.) X (Factor your answer completely.) Find an equation of the tangent line to the graph of f at the point (1,4). Give your answer in the slope-intercept form. For the following inductors, find the energy stored in the magnetic field.a) A 10.0cm long solenoid with 4 turns/cm, a 1.0cm radius, and a current of 4.0 A.b) A rectangular toroid with inner radius 10.0 cm, outer radius 14.0cm, and a height of 2.0cm. It is comprised of a total of 1000 windings and has a current of 1.25 A.c) An inductor with a potential difference of 55mV after 1.5s with a current that varies as I(t) =I0 Ct. I0 = 10.0A, and C = 3A/s. 4. (15) Some dog breeds are either black (BB, Bb) or brown (bb). However, the ability to create pigment (colour) is the result of a separate gene. For black or brown color to show, the AA or Aa must also be present; if not, the aa genotype results in no colour (albino/white). All responses must include the dihybrid Punnett squares with the results clearly stated. lting from a croce between two completely A 3.9-m-diameter merry-go-round is rotating freely with an angular velocity of 0.70 rad/s. Its total moment of inertia is 1320 kg.m. Four people standing on the ground, each of mass 70 kg suddenly step onto the edge of the merry-go-round. What is the angular velocity of the merry-go-round now? What if the people were on it initially and then jumped off in a radial direction (relative to the merry-go-round)? A car, initially at rest, accelerates at a constant rate, 3.56 m/s2 for 37.1 seconds in a straight line. At this time, the car decelerates at a constant rate of -2.00 m/s2, eventually coming to rest. How much distance (in meters) did the car travel during the deceleration portion of the trip? If you own an investment that will pay out $794 per year for the next 3 years, value what the company is worth today using a discount rate of 2%. (Please use 5 decimal places and do not use a $ symbol in your answer)If you own a company that will pay out $858 per year for the next 4 years, value what the company is worth today using a discount rate of 6%. (Please use 5 decimal places and do not use a $ symbol in your answer)Assume you owe the following 92 in 3 years, 43 in 2 years and 25 in one year, using a discount rate of 3% find the present value of what you owe. (Please use 5 decimal places and do not use a $ symbol in your answer)You plan to buy an engagemnt ring in 3 years. Assume you can earn an interest rate of 5% on whatever is in your bank account. If you can add 2146 to your account today 2187 to your account in one year and 2125 in two years, how much should be in your account in 3 years? (Please use 5 decimal places and do not use a $ symbol in your answer)