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Flounder Inc. issues $3,200,000 of 7% bonds due in 14 years with interest payable at year-end....

Flounder Inc. issues $3,200,000 of 7% bonds due in 14 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 9%. Click here to view factor tables What amount will Flounder receive when it issues the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Amount received by Flounder when bonds were issued $enter a dollar amount rounded to 0 decimal places

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Answer #1

Issue price of bonds = Present value of interest + Present value of principal payment

= 3200000*7%*7.78615+(3200000*0.29925)

Issue price of bonds = 2701698

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