Moore Industries Manufactures Exercise Equipment

Multiple Choice

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 £3,000,000 of 11% bonds on March 1, 2018, due on March 1, 2033, 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) £3,330,000
B) £1,904,664
C) £3,230,594
D) £2,536,455