Question

Mystery, Inc. is contemplating selling bonds. The issue is to be composed of 800 bonds, each with a face amount of $750. How much is Mystery, Inc. able to borrow (in total) if each bond is sold at 95% of par

Answer 1

$570,000

Step-by-step explanation:

Calculation to determine How much is Mystery, Inc. able to borrow (in total) if each bond is sold at 95% of par

Using this formula

Total Amount borrowed=Bonds*Face value*95% of par

Let plug in the formula

Total Amount borrowed=800*$750*0.95

Total Amount borrowed=$570,000

Therefore the amount the Mystery, Inc. will be able to borrow (in total) if each bond is sold at 95% of par is $570,000