Make-It-Big Corporation is planning to build a new factory costing $2,000,000. On January 1, 2023, Make-It-Big plans to issue bonds in the amount of $1,800,000 that will be paid in five years. Interest of $45,000 will be paid semiannually each January 1 and July 1 with the first interest payment at the end of the period on July 1, 2023.

Required

a. If the market rate of interest is 6%, will Make-It-Big raise enough to build the factory?

b. If the market rate of interest is 2%, will Make-It-Big raise enough to build the factory?