Sand Explorers Issues Bonds Due in 10 Years with a Stated

question 244

Multiple Choice

Sand Explorers issues bonds due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. Using present value tables, calculate the issue price of the bonds.

• A) $139,609.
• B) $186,410.
• C) $214,877.
• D) $200,000.

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Definitions:

Cycle Inventory

Cycle inventory refers to the portion of inventory that companies hold to fulfill regular sales orders, rotating regularly with demand.

Managerial Levers

are tools or mechanisms that managers can pull to influence the performance, direction, or strategy of a business, such as policy adjustments, operational changes, or incentive schemes.

Fixed Cost

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance, providing a base level of costs in an operation.

Transportation

The act or process of moving people or goods from one place to another using various modes such as vehicles, trains, ships, or airplanes.