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    Galway Bay Enterprises: compute the present value of a bond

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    Please explain how to compute the present value of a bond?

    Galway Bay Enterprises issued 10%, 8-year, $2,000,000 par value bonds that pay intrest semiannually on October 1 and April 1. The bonds are dated April 1, 2002, and are issued on that date. The discount rate of interest for such bonds on April 1, 2002, is 12%. What cash proceeds did Galway Bay receive from issuance of the bond?

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    https://brainmass.com/business/accounting/galway-bay-enterprises-compute-the-present-value-of-a-bond-28887

    Solution Summary

    The solution shows all the calculations to arrive at the amount of cash proceeds from the issuance of the bond.

    $2.19

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