The U.S. government will pay AirSys $2,500,000 each six months, equal to 2.5% of the $100 million face amount of the treasury bonds (5% annual coupon rate, paid in two installments each year), and will repay the $100 million at the end of five years. At the time AirSys purchases the bonds, the market prices these bonds to yield AirSys 6% annually (3% each six months). The bonds are classified as
held to maturity. AirSys will pay an amount equal to _____ for the bonds.
a. present value of an annuity of $2.5 million for 10 periods plus the present value of $100 million paid at the end of 10 periods, both cash flows discounted at 3% per period
b. present value of an annuity of $5.0 million for 5 periods plus the present value of $100 million paid at the end of 5 periods, both cash flows discounted at 6% per period.
c. present value of an annuity of $2.5 million for 10 periods plus the present value of $100 million paid at the end of 10 periods, both cash flows discounted at 2.5% per period.
d. present value of an annuity of $5.0 million for 5 periods plus the present value of $100 million paid at the end of 5 periods, both cash flows discounted at 5% per period.
e. the future value of cash flows totaling $125 million
A
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A. appreciated against the U.K. pound and depreciated against the Canadian dollar. B. depreciated against the U.K. pound and appreciated against the Canadian dollar. C. appreciated against both the U.K. pound and the Canadian dollar. D. depreciated against both the U.K. pound and the Canadian dollar.
If there are conflicting terms on commercial paper, printed terms prevail over handwritten terms.
Answer the following statement true (T) or false (F)
This process is particularly effective when the team has a dominating participant who shuts down the team discussion with criticism.
A. the Delphi method B. brainstorming C. nominal group technique D. consensus
The purpose of accounting is
A. assumed around the world to be the same. B. about to be codified in the process of convergence. C. to build an objective measure of a company's results. D. influenced by a country's culture.