Question

a)A project with an initial cost of $58,090 is expected to generate annual cash flows of $15,700 for the next 6 years. What is the project's internal rate of return?

b)Crossfade Corp. has a bond with a par value of $2,000 that sells for $2,086.94. The bond has a coupon rate of 6.72 percent and matures in 20 years. If the bond makes semiannual coupon payments, what is the YTM of the bond?

c)

You expect to receive $3,300 upon your graduation and will invest your windfall at an interest rate of .47 percent compounded quarterly until the account is worth $4,900. How many years do you have to wait until you reach your target account value?

Answer #1

a | Year | Cash Flows | ||

0 | -58090 | |||

1 | 15700 | |||

2 | 15700 | |||

3 | 15700 | |||

4 | 15700 | |||

5 | 15700 | |||

6 | 15700 | |||

IRR | 15.84% | |||

IRR(Values 0 to 6) | ||||

b | FV | 2000 | ||

PV | 2086.94 | |||

PMT | 67.2 | =2000*6.72%/2 | ||

NPER | 40 | (20 x 2) | ||

YTM | 6.33% | |||

=RATE(40,67.2,-2086.94,2000)*2 | ||||

c | FV = PV x (1+r)^n | |||

Here, | FV = | 4900 | ||

PV = | 3300 | |||

r = | .47%/4 | |||

n = | ? | |||

Putting the values in formula, we get | ||||

4900 = 3300 x (1+.0047/4)^n | ||||

1.001175^n = | 4900/3300 | |||

1.001175^n = | 1.484848485 | |||

Taking ln both sides | ||||

n = | ln(1.484848)/ln(1.001175) | |||

n = | 336.63 | |||

So converting in years = 84.1575 |

You expect to receive $3,900 upon your graduation and will
invest your windfall at an interest rate of .59 percent per quarter
until the account is worth $5,350. How many years do you have to
wait until you reach your target account value? rev:
09_18_2019_QC_CS-181155 Multiple Choice 13.43 years 11.76 years
12.54 years 14.47 years 13.55 years

8) Assume that a bond has a coupon rate of 10 percent, makes
annual coupon payments, and has a par value of $1,000. Calculate
the bond’s value under the following conditions.
The bond matures in 5 years and the YTM is 5%:
The bond matures in 5 years and the YTM is 10%:
The bond matures in 5 years and the YTM is 15%:
The bond matures in 15 years and the YTM is 5%:
The bond matures in 15...

Crossfade Corp. has a bond with a par value of $2,000 that sells
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matures in 25 years. If the bond makes semiannual coupon payments,
what is the YTM of the bond?

Crossfade Corp. has a bond with a par value of $2,000 that sells
for $1,994.54. The bond has a coupon rate of 6.60 percent and
matures in 16 years. If the bond makes semiannual coupon payments,
what is the YTM of the bond?
5.97%
6.30%
3.31%
Incorrect
4.97%
6.63%

1. Ahmad Corp. just issued ten-year bonds that make annual
coupon payments of $50. suppose you purchased one of these bonds at
par value ($1,000) when it was issued. Right after your purchase,
market interest rates jumped, and the YTM (interest rate) on your
bond rose to six percent. What is the new price of you bond?
2. Assume a bond matures for $1000 six years from today and has
a 7% coupon rate with semiannual coupons. What is the...

A project with an initial cost of $28,300 is expected to
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over each of the next five years, respectively. What is the
project's payback period?
3.50 years
3.39 years
3.66 years
3.60 years
3.76 years

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over each of the next five years, respectively. What is the
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Multiple Choice
3.48 years
3.37 years
3.68 years
3.58 years
3.74 years

A project with an initial cost of $26,550 is expected to
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Multiple Choice
3.71 years
3.71 years
3.54 years
3.45 years
3.34 years

a project with an initial cost of $50,670 is expected to
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