单选题

A company issues $10 million in 8 percent annual, 5-year bonds, when the market rate is 8.25 percent, The initial balance sheet liability and liability one year from the date of issue are closest to（）。

【正确答案】 B

【答案解析】

PMT=800000; FV=10000000; N=5; I/Y=8.25; CPT →PV=9900837.
Interest expense=9900836.51× 0.0825=$816819.01.
Year-end adjustment: 816819.01－800000=$16819.01.
Year-end debt=$9900836.51+$16819.01=$9917655.52.
Note: Since this is a discount bond, we know the value will increase each year. So we really didn't have to do any calculations to answer this question.