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What is the selling price of the bonds

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Question - Moore Industries manufactures exercise equipment. Recently the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's exercise equipment. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing P2,000,000 of 11% bonds on March 1, 2010, due on March 1, 2025, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 10%. What is the selling price of the bonds?

a. 1,269,776

b. 2,220,000

c. 1,690,970

d. 2,153,730

Reference no: EM132945126

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