How much will corporation have to increase the deposits

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Reference no: EM132088226

Question: XYZ Corporation, having recently issued a $50 million 10-year bond issue, is committed to making annual sinking fund deposits of $3, 450,000. The deposits are made on the last day of each year and yield a return of 8%. Will the fund, at the end of 10 years, be sufficient to retire the bond issue? If not, what will be the deficit.

If there is a deficit, how much will XYY have to increase their deposits to be able to pay off the bond issue.

Reference no: EM132088226

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