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Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

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EXERCISE D-2

Purpose: (L.O. 7) This exercise will illustrate a situation that involves the present value of an annuity along with the present value of a single amount.

Bonds are being issued and the following facts are relevant:

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Instructions

Compute the present value of all of the promises embodied in the bond (maturity value of $7,500,000 plus semiannual interest payments of $300,000 each for 10 years).

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