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You are the financial planner for Johnson Controls. Assume last year's profits were $880,000. The...

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Accounting

You are the financial planner for Johnson Controls. Assume last year's profits were $880,000. The board of directors decided to forgo
dividends to stockholders and retire high-interest outstanding bonds that were issued 6 years ago at a face value of $1,490,000. You
have been asked to invest the profits in a bank. The board must know how much money you will need from the profits earned to retire
the bonds in 8 years. Bank A pays 6% compounded quarterly, and Bank B pays 7% compounded annually. (Use Table 1 and Table 2
provided.)
Note: Do not round intermediate calculations. Round your answers to the nearest dollar amount.
a-1. Which bank would you recommend?
Bank A
Bank B
a-2. How much of the company's profit should be placed in the bank?
Profit
b. If you recommended that the remaining money not be distributed to stockholders but be placed in Bank B, how much would the
remaining money be worth in 8 years?
Future Value
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