On January 1, 2013, Jason Company Issued $5 Million of 10-Year

question 88

Multiple Choice

On January 1, 2013, Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided: Calculate the issuance price if the market rate of interest was 10%.
$\begin{array}{cccc}\text { Time Period } &\text { Interest } &\text { PV of } \$ 1 & \text { PV of a } \$ 1 \text { Annuity }\\\hline10 & 10 \% & .386 & 6.145 \\10 & 8 \% & .463 & 6.710 \\10 & 12 \% & .322 & 5.650\end{array}$

• A) $5,427,000.
• B) $4,477,000.
• C)$4,435,000.
• D)$5,000,000.

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Definitions:

Staff Units

Specialized departments or personnel that provide support, advice, and expertise to line units within an organization, rather than being directly involved in day-to-day operations.

Specialized Expertise

Specific, advanced knowledge or skills in a particular field or area of study.

Horizontal Division

The organizational structure that involves dividing a company based on different types of jobs or tasks, leading to departments that are on the same level.

Line Units

Core units or departments in an organization that are directly involved in its primary activities or objectives.