On January 1, 2021, Wooten Technology Associates sold computer equipment to the Denison Company. Deliv- ery was made on January
2 answers:
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Answer:
$1,032.01
Explanation:
Given:
Face value of bond (FV) = $1,000
Coupon rate = 6% annual rate or 6% / 2 = 3% semi-annual rate
Coupon payment (pmt) = 0.03 × $1,000
= $30
Rate = 5.5% annually or 5.5 / 2 = 2.75%
Time period (nper) = 8 × 2 = 16 periods
Current value of bond is present value of bond which can be computed using spreadsheet function =PV(rate,nper,pmt,FV)
So, present value of bond is $1,032.01.
PV is negative as it's cash outflow.
