Determine the present value of the bonds payable

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Reference no: EM132218887

Question: 1- On January 1, you win $2,800,000 in the state lottery. The $2,800,000 prize will be paid in equal installments of $280,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use Table 3. Round to the nearest whole dollar.

2- Moss Co. issued $101,000 of four-year, 11% bonds with interest payable semiannually, at a market (effective) interest rate of 8%.

Determine the present value of the bonds payable, using the present value tables in Exhibit 8 and Exhibit 10.

Note: Round to the nearest dollar.

Reference no: EM132218887

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