Question

Boris, Inc., is considering the sale of two bond issues.
Choice A is a $400,000 bond issue that pays semiannual interest of $32,000 and is due in 20 years.
Choice B is a $400,000 bond issue that pays semiannual interest of $30,000 and is due in 15 years. Assume that the market interest rate for each bond is 12 percent.
Calculate the amount that Boris will receive if both bond issues are made. (Hint: Calculate the present value of each bond issue and sum.)



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  • CreatedSeptember 10, 2014
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