(a) Using the discount factors given above, complete the not present value table below. for both
options under consideration at CD plc.
Option 2
Downsize
Option 1
Amalgamate
Estimated
Net Cash-
Present
Value
flow
Year
Estimated
Net Cash-
flow
Present
Value
0
(84000000) (£4000000)
(£1 200 000) (E1200000)
£1000 000
£300 000
2
22000000
£600000
3
£4000000
2800000
NPV
Option 1
Option 2.2
(4)

Mae jong corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of $2 par value ordinary shares. the market rate of interest on similar bonds is 12%. interest is payable annually on december 31, and the bonds were issued for total proceeds of $1,000,000. in accounting for these bonds, mae jong corp. will: (a) first assign a value to the equity component, then determine the liability component. (b) assign no value to the equity component since the conversion privilege is not separable from the bond.(c) first assign a value to the liability component based on the face amount of the bond.(d) use the “with-and-without” method to value the compound instrument.