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Question 12 (RMCB-0043)
On January 1, 2012, Colt Company issued 10-year bonds with a face
amount of $1,000,000 and a stated interest rate of 8% payable annually
on January 1. The bonds were priced to yield 10%. Present value factors
are as follows:
Present value of 1 for 10 periods
Present value of an ordinary annuity of 1 for 10 periods
The total issue price (rounded) of the bonds was
Question 13 (FINM-0001)
Net working capital is the difference between
Question 14 (RMCB-0041)
Assume that management of Trayco has generated the following data
about an investment project that has a five-year life:
Initial investment
Additional investment in working capital
Cash flows before income taxes for years 1 through 5
Yearly depreciation for tax purposes
Terminal value of machine
Cost of capital
Present value of $1 received after 5 years discounted at 8%
Present value of an ordinary annuity of $1 for 5 years at 8%