Purchase Solution

Present Value and Bond Liability

Not what you're looking for?

Ask Custom Question

Computation of present value and bond liability. See attached file for full problem description.

Attachments
Purchase this Solution

Solution Summary

The solution has two problems - E6-5 relating to computation of present value and E6-13 relating to computation of bond liability for Lance Armstrong Inc

Solution Preview

a. This is an ordinary annuity and the present value can be found using the table 6-4. The formula to use is
PV = Annuity Amount X PVIFA (period, interest rate)
Given the periods and the interest rates, we look up the factor in the table. Multiply the annuity amount by the factor to get the present value.
PV = 30,000 X PVIFA (8,12%).
From table 6-4 the factor for 8 periods and 12% is 4.96764
PV = 30,000 X 4.96764 = 149,029.20

b. We do the same way here, the time period is 16 and the interest rate ...

Purchase this Solution


Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.