10. What is the present value at year zero for the following cash flow at a discount rate of 10%? At year zero (now), you will receive $12,000.

$9,016

$12,000

$9,917

$8,196

None of the above

26. Your friend promises you a perpetuity of $1 every year. The first payment occurs in year 2, which of the following is right about its present value at time zero if r = 5%?

$20.00

$19.05

$10.82

No enough information

None of the above

29. Your friend promises you an annuity of $1 every year for 8 years. The first payment occurs at year 2, which of the following is right about its present value at year zero if r = 5%?

$6.46

$6.16

$5.51

No enough information

None of the above

32. How much is the par value for a 5-year maturity bond that has a price of $1,000

now and an annual coupon rate of 9% if the interest rate is 9%?

$700

$1,050

$1,000

$1,100

None of the above

33. What is the annual coupon payment for a bond (par value of $1,000) with 7 years

until maturity, a price of $1,000, and a discount rate of 6%?

$80

$70

$60

$50

None of the above

34. What happens to the price of a three-year bond with an 8% coupon when interest rates change from 6% to 8%?

A price increase of $53.47

A price decrease of $51.54

A price decrease of $53.47

No change in price

None of the above

35. What is the rate of return for an investor who pays $1,000 for a three-year bond

with a 7% coupon rate and sells the bond one year later for $1,000?

5%

6%

7%

8%

none of the above

Need help to solve questions with the correct formula. Questons from Financial Mangement Class. Thank You