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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
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Corporation purchased 10, $1,000, 8% bonds of Jackson Corporation when the market rate of interest was 10%. Interest is paid semiannually on the bonds, and the bonds mature in 6 years.Â
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Instructions:
Compute the total price paid by XYZ Corporation for the bonds showing your calculation for the present value of the principal and the present value of the interest payments.Â
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Present value tables (Exhibit 8-14 and Exhibit 8-15) are available on pages 452 and 453 of your Harrison, Horngren, and Thomas textbook. NOTE: Be sure you review the PV Tables completely to ensure you find the correct period and interest rate for the calculation.Â
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