On January 1,20A,A-Ace Corp

question 2

Multiple Choice

On January 1,20A,A-Ace Corp.issued $3,000,000 par value 12%,10 year bonds which pay interest each December 31.If the market rate of interest was 14%,what should the issue price of the bonds be? (The present value factor for $1 in 10 periods at 12% is .3220 and at 14% is .2697.The present value of an annuity of $1 factor for 10 periods at 12% is 5.6502 and at 14% is 5.2161.)

• A)$2,686,896
• B)$2,843,172
• C)$3,000,000
• D)$3,339,084

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Definitions:

Farm Goods

Products produced through agriculture, including crops, livestock, and other raw materials.

Increasing Production

Refers to the process of augmenting the output or manufacture of goods and services in an economy.

Agricultural Adjustment Act

A New Deal legislation passed in 1933 aimed at reducing agricultural production through financial incentives, thus raising farm prices.