Exercise 6B-13

Concord 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 $3,103,800 of 7% term corporate bonds on March 1, 2017, due on March 1, 2032, with interest payable each March 1 and September 1. First interest payment will be made on September 1, 2017. At the time of issuance, the market interest rate for similar financial instruments is 8%. As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.