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Suppose That Healdsburg Renegotiates the 8% Notes on December 31

Question 65

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Suppose that Healdsburg renegotiates the 8% notes on December 31, 2014 when the going interest rate is 8%. Healdsburg agrees to make 12 equal annual installments, commencing on December 31, 2015, rather than pay the $225 million in a lump sum at maturity. What would the annual payments be?

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$225 million would be the PVA;...

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