Question 2 (4 points) Clancey Inc. issues Bonds Payable with a face of $2,000,000 and a 7% stated face rate of interest. The bonds are due at the end of 10 years. Interest is paid and compounds on a semi-annual basis (at the end of every six months). The market rate for similar bonds is 8%. Bonds prices are computed using the present value of the interest added to the present value of the maturity amount. In the space below list four answers labelled as 1), 2), 3) and 4). Notice this is just asking how you would go about approaching the problem. You do not need to look up factors and compute the final $$ price of the bond. 1) What is the amount of cash interest that will change hands every six months 2) Which present value concept will you used multiply times the cash interest? PVOA or FVOA (present value of an ordinary annuity or future value of an ordinary annuity or something else? 3) When looking up the table factor for #2 just above... how many periods and what interest rate would you use? X? periods. X ? rate 4) When calculating the Present Value of the Maturity Value of the $2,000,000 face. what Table, periods, and interest rate will you use? For example, you might word yo answer something like FVAD table, 3 periods. 10%.. 2 -5 18 21 24