XYZ Company issues $1,000,000 of 5% bonds due in 10 years with interest payable at each year end. The current market rate of interest for these bonds is 6%. What amount will XYZ receive when it issues the bonds? (Answers may vary slightly due to rounding. Choose the best answer from among those listed below.)

Hint: The coupon rate is 5%, which means the annual interest payments will be 5% of the bond's face value. The 6% market rate is used to discount cash flows in the present value calculations. To determine the cash received, you'll need to discount both the stream of 10 annual interest payments and then separately discount the return of principal after 10 years.

$926,399

$949,871

$1,077,217

$1,132,487