A $100,000 bond was issued on 1/1/10. It pays interest (coupon) of 6% per annum, with payments occurring every six months. The bond is due in 2 years. A potential investor wanted to know what the bond should be worth on the day of issue, if the prevailing rate for similar bonds (market rate) was 8%. An inexperienced accountant attempted to calculate what the bond should be worth on 1/1/10. Review the work of the accountant, and answer the questions below pertaining to possible mistakes.

Calculation of present value by inexperienced accountant (payment) Periods of interest Interest factor PV 4000 1.0300 3,883 4000 1.0609 3,770 4000 3 1.0927 3,661 4000 1.1255 3,554 100000 2 1.0609 94,260 TOTAL $109,128 24.
The calculation in the PV Column for the first payment
A. Is correct
B. Should be 2,885
C. Should be 2,912
D. Should be 3,846

In december of 2004, the company you own entered into a 20-year contract with a grain supplier for daily deliveries of grain to its hot dog bun manufacturing facility. the contract called for "10,000 pounds of grain" to be delivered to the facility at the price of $100,000 per day. until february 2017, the supplier provided processed grain which could easily be used in your manufacturing process. however, no longer wanting to absorb the cost of having the grain processed, the supplier began delivering whole grain. the supplier is arguing that the contract does not specify the type of grain that would be supplied and that it has not breached the contract. your company is arguing that the supplier has an onsite processing plant and processed grain was implicit to the terms of the contract. over the remaining term of the contract, reshipping and having the grain processed would cost your company approximately $10,000,000, opposed to a cost of around $1,000,000 to the supplier. after speaking with in-house counsel, it was estimated that litigation would cost the company several million dollars and last for years. weighing the costs of litigation, along with possible ambiguity in the contract, what are three options you could take to resolve the dispute? which would be the best option for your business and why?

An investment offers a total return of 18 percent over the coming year. janice yellen thinks the total real return on this investment will be only 14 percent. what does janice believe the inflation rate will be over the next year?

Lambert manufacturing has $100,000 to invest in either project a or project b. the following data are available on these projects (ignore income taxes.): project a project b cost of equipment needed now $100,000 $60,000 working capital investment needed now - $40,000 annual cash operating inflows $40,000 $35,000 salvage value of equipment in 6 years $10,000 - both projects will have a useful life of 6 years and the total cost approach to net present value analysis. at the end of 6 years, the working capital investment will be released for use elsewhere. lambert's required rate of return is 14%. the net present value of project b is: