managerial finance

Project Description:

rau inc. has 6.0 percent coupon bonds on the market with 9 years to maturity. the bonds make semi-annual payments and currently sell for 110 percent of par. what is the ytm?

question 2.
jj enterprises is considering the purchase of a new machine that will produce thumb drives. the new machine will require an initial investment of $100,000 and has an economic life of five years and will be fully depreciated by the straight line method. the machine will produce 12,000 thumb drives per year with each costing $2.00 to make. each will be sold at $4.50. assume jj enterprises uses a discount rate of 14 percent and has a tax rate of 34 percent. what is the npv of the project and should jj enterprises make the purchase.

question 3.
vbn is a microcap stock included in the wilshire 5000 index. the following lists the actual returns on vbn and the wilshire 5000 index for 6 recent years.

year vbn wilshire
20x1 -18.0% 13.0%
20x2 -10.0% -8.0%
20x3 15.0% 1.0%
20x4 60.0% 32.0%
20x5 15.0% 27.0%
20x6 28.0% 13.0%

i) calculate the covariance between the returns on vbn and the wilshire 5000 index.
ii) does vbn’s returns move with or against the returns on the wilshire 5000?
iii) is vbn highly, moderately, or barely sensitive to fluctuations in the wilshire 5000?

question 4
you are considering buying a bond issued by general motors with exactly 5.5 years remaining to maturity that just paid a coupon yesterday. it rained on your paper this morning so you do not know what the coupon rate is. however you are able to see that the quoted price is listed as $105-20 and the annualized yield is 7%, with semi-annual compounding. if the coupon is paid semi-annually, what is the quoted annualized coupon rate? show your work.

need to show all work and need back within 1 hour
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