A Company Is Setting Up a Sinking Fund to Pay

question 48

Short Answer

A company is setting up a sinking fund to pay off $8,654,000 in bonds that are due in seven years.The fund will earn 7% interest,and the company intends to put away a series of equal year-end amounts for seven years.What amount must the company deposit annually?

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Definitions:

Union Workers

Employees who are members of a labor union, a collective organization that represents their interests in negotiations with employers over issues like wages, benefits, and working conditions.

Evaluative Tool

An instrument or methodology used to assess the effectiveness, impact, or value of a program, policy, or process.

Good Faith Bargaining

The duty of both parties in a negotiation (e.g., employers and employees' union) to meet and negotiate at reasonable times with willingness to reach an agreement on matters under negotiation, such as wages, hours, and terms and conditions of employment.

Strike Capability

The ability of workers or a labor union to carry out a strike effectively in pursuit of their demands.