Question

1. Suppose you deposited $13,000 in a savings account earning 2.7% interest compounding daily. How long...

1. Suppose you deposited $13,000 in a savings account earning 2.7% interest compounding daily. How long will it take for the balance to grow to $26,000? Answer in years rounded to one decimal place.

2. What is the Profitability Index of a project that costs $43,000 today and is expected to generate annual cash inflows of $5,000 for the following 10 years. Assume the company's WACC is 8%. Round to two decimal places.

3. What is the price of a 21­-year, 6.8% semi-annual coupon bond with $1,000 face value if the yield to maturity on similar bonds is 7.9%? Round to the nearest cent.

Homework Answers

Answer #1

1)

Hence, correct option is 25.7 years (9,371/365)

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