You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $$10\mathrm{.}2$ million face value of $10-$year debt. You have the following data for each:

A public issue: The interest rate on the debt would be $8\mathrm{.}6\%,$ and the debt would be issued at face value. The underwriting spread would be $1\mathrm{.}52\%,$ and other expenses would be $$82,000.$

A private placement: The interest rate on the private placement would be $9\mathrm{.}2\%,$ but the total issuing expenses would be only $$32,000.$

a$-1.$ Calculate the net proceeds from public issue.

Note: Enter your answer in dollars not millions of dollars.

a$-2.$ Calculate the net proceeds from private placement.

Note: Enter your answer in dollars not millions of dollars.

b$-1.$ Calculate the Present Value of the extra interest on the private placement.

Note: Do not round intermediate calculations. Enter your answer in dollars not millions of dollars. Round your answer to the nearest whole dollar amount.

b$-2.$ Other things being equal, which is the better deal?

Answer is complete but not entirely correct.

$\backslash$table$[[$a$-1.$ Net proceeds of publio issue,$$10,087,896x,],[$a$-2.$ Net proceeds of private placement,$$10,168,000\frac{O}{?},],[$b$-1.$ Present value of extra interest,$920,000,],[$b$-2.$ Better deal is$,$Public issue,$(]]$