Marwick Corporation Issues 8%,5-Year Bonds with a Par Value of $1,000,000

question 102

Multiple Choice

Marwick Corporation issues 8%,5-year bonds with a par value of $1,000,000 and semiannual interest payments.On the issue date,the annual market rate for these bonds is 6%.What is the bond's issue (selling) price,assuming the following Present Value factors:

• A)$1,000,000
• B)$789,244
• C)$1,341,208
• D)$1,085,308
• E)$658,792

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Definitions:

Obsidian

A generally gray to black, shiny volcanic glass, usually of felsic composition.

Andesite

A volcanic rock of intermediate composition, typically found in volcanic arcs associated with subduction zones.

Volcanic Domes

Rounded, bulbous formations of lava that accumulate near and around volcanic vents, often resulting from the slow extrusion of viscous lava.

Volcanic Glass

A type of rock that forms from the rapid cooling of magma without crystallization, resulting in a smooth, glassy texture.