Question

Johnston, Inc. sold 10-year bonds with a 6% coupon rate to yield 5%. The face value is $400,000. The bonds pay interest semi-annually. What is the amount of cash proceeds?

The cash proceeds are? Please show work on excel and show calculated formulas and use answer by using PV and/or FV table factors

Answer 1

Year	Cash flows (400,000*3%)	Present value factor @2.5%	Present value
1	12,000	0.9756098	11,707
2	12,000	0.9518144	11,422
3	12,000	0.9285994	11,143
4	12,000	0.9059506	10,871
5	12,000	0.8838543	10,606
6	12,000	0.8622969	10,348
7	12,000	0.8412652	10,095
8	12,000	0.8207466	9,849
9	12,000	0.8007284	9,609
10	12,000	0.7811984	9,374
11	12,000	0.7621448	9,146
12	12,000	0.7435559	8,923
13	12,000	0.7254204	8,705
14	12,000	0.7077272	8,493
15	12,000	0.6904656	8,286
16	12,000	0.6736249	8,083
17	12,000	0.6571951	7,886
18	12,000	0.6411659	7,694
19	12,000	0.6255277	7,506
20	12,000	0.6102709	7,323
20	400,000	0.6102709	244,108
		Cash proceeds	431,178