Cash inflows and outflows

Messier Company is planning to finance several projects and wants you to determine the cash inflows and outflows of the following bonds. The market interest rate for Messier Company is 8 percent.

1. $100,000, 8 percent note, interest payable quarterly, due in eight years.

2. $500,000, 6 percent note, interest payable semiannually, due in 10 years.

3. $250,000, 10 percent note, interest payable semiannually, due in six years.

Required:

A. What is the cash Messier will receive from each note?

B. What are the annual cash outflows for each note?

C. What are the total cash outflows for each note?

Solution: