The following present value factors have

$13.00

Description

On January 1, 2009, McDougald Company issued $8,000,000 of 10-year bonds at a 11% stated interest rate to be paid annually. The following present value factors have been provided to answer the subsequent questions:

Time Period Interest PV of $ PV of an Annuity
10 9% 0.422 6.418
10 11% 0.352 5.889
10 13% 0.295 5.426

Reference: 11_04

Calculate the issuance price if the market rate of interest is 9%.

Choose one answer.

a. $8,000,000
b. $9,023,840
c. $8,923,840
d. $11,376,000

answer is 9023840. how????

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