Determine the amount of deficiency

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Question 1 - Ayayai Corporation, having recently issued a $20,025,900, 15-year bond issue, is committed to make annual sinking fund deposits of $624,000. The deposits are made on the last day of each year and yield a return of 10%. Determine the amount of deficiency.

Question 2 - Under the terms of his salary agreement, president Newman Walters has an option of receiving either an immediate bonus of $71,500, or a deferred bonus of $91,000 payable in 10 years. Ignoring tax considerations and assuming a relevant interest rate of 4%, which form of settlement should Walters accept?

Reference no: EM132565558

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