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Carla Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing

Carla Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the companys bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,470,700 of 10% term corporate bonds due on March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 8%.

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