Your company is considering issuing a bond to pay for needed upgrades. They have narrowed down the options and want your final opinion on which one to issue. The upgrades will cost $500,000 and your company wants to pay of the bond in about 8 years. Your company's effective rate is 6%. Which bond should they issue and what is the Present Value of the Bond?

	Bond 1	Bond 2
Stated Rate	5%	6%
Face Value	$500,000	$600,000
Payments/Year	Annual	Annual
Years	8	8

		Bond 2 $599,760
		Bond 1 $500,000
		Bond 2 $500,750
		Bond 1 $468,750