Question: Enviro Company issues 8%, 10-year bonds with a par value of $290,000 and semiannual interest payments. On the issue date, the annual market rate for

Enviro Company issues 8%, 10-year bonds with a par value of $290,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 .

Confirm that the bonds selling price is approximately correct. Use the present value tables B.1 and B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations.)

Par Value - Selling Price x Price 87 1/2 Table Value Cash Flow $290,000 par (maturity) value $11,600 interest payment Price of Bond Present Value due to rounding of table values 0

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