The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2023 disclosed
the following:
7.85% notes due 2024 $ 212,400,000
8.35% notes due 2029 $ 356,200,000
8.60% notes due 2038 $ 237,000,000
8.23% notes due 2043 $ 212,000,000
7.15% notes due 2025 $ 26,200,000
The above table summarizes the long-term debt of the Company on December 31, 2023. All of the notes were originally issued at their
face (maturity) value and have been gradually repaid over time so that these amounts are the remaining balances at this date.
Assume that the notes pay interest annually and mature on December 31 of the respective years.
Required:
Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2024, to provide tires that cost
Healdsburg $19.2 million to produce. The buyer offers Healdsburg $6.60 million in cash and agrees to take over only the principal
payment on Healdsburg's 7.15% debt notes. Assume that the going market interest is 6% at the time. What would Healdsburg's gross
profit be on the sale?
Note: Use tables, Excel, or a financial calculator. Enter your answer in whole dollars. Round your final answer to nearest whole
dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Gross profit
