Metlock Inc. manufactures cycling equipment. Recently, the company’s vice-president of operations has requested construction of a...

Metlock Inc. manufactures cycling equipment. Recently, the company’s vice-president of operations has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,380,000 of 13% term corporate bonds on March 1, 2020, due on March 1, 2034, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 12%.

As Metlock's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)

Expert Solution

ekkarill92 answered 1 year ago

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