1. Sisyphean Company owns a bond with a face value of $1000. maturity in 15 years. The...
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8% and the coupon payments are made semi-annually. Assuming this bond is trading at $1112, calculate this bond's YTM.
2. Wyatt Oil is considering drilling a new oil well, which is expected to produce the same amount of oil initially. 10 million barrels per year. Wyatt has a long-term contract that allows them to sell oil at an affordable price. $2.50 profit per barrel. The initial cost of the drilling rig is $175 million. If the oil rate is from the rig, the output is reduced by 3% per year and the discount rate is 9% per year, then what will be the NPV of this new oil well?
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
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