Each of the bond issues has a sinking fund requirement for retiring the entire principal amount of the issue on its maturity date. The coupon rates and rates of return on the sinking fund investments are compounded semiannually. In each case calculate (to the nearest dollar):
a. The size of the sinking fund payment at the end of every six months.
b. The annual cost of the debt.
c. The book value of the debt at the end of the indicated interval. (Round the sinking fund payment to the nearest dollar before calculating the book value.)

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Principal amount of bond issue ($ millions) Sinking fund rate of return (%) Calculate book value at the end 0f interval Term (years) Coupon rate (%) 6 8.5