Compute the amount that oriole will realize from the sale

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Problem 1: On January 2, 2020, Oriole Company wishes to issue $6300000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1. The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Oriole will realize from the sale (issuance) of the bonds.

Present value of 1 at 8% for 10 periods 0.4632

Present value of 1 at 10% for 10 periods 0.3855

Present value of an ordinary annuity at 8% for 10 periods 6.7101

Present value of an ordinary annuity at 10% for 10 periods 6.1446

Option 1: $6300000
Option 2: $5525528
Option 3: $6300038
Option 4: $6967964

Reference no: EM132780570

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