GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like...
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GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like to sell to you. The bond matures in 10 years, has a face value of $1,000 and a coupon interest rate of 6% (paid annually). If you know that the yield to maturity on similar bonds is 8%, what is the maximum price you would be willing to pay for the bond? a $865.80 b. $940 C. $1000 d. $1,147.20 10. SAT-Corp. is considering the purchase of a new piece of machinery that will cost them $1,800,695 today (in 2010). This piece of machinery, however, will increase the company's after-tax cash flows by $500,000 in 2011, $750,000 in 2012, $1,000,000 in 2013. If SAT-Corp. 's discount rate (WACC) is 10%, then the NPV of making this purchase is a $449,305 b $243,896 © $25,000 d $1,760,00 11. What is the internal rate of return of a project costing $3,000, having after-tax cash flows of $1.500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1.500 cash flow? (rounded to the nearest percentage) a 13% b 15% c. 16% d. 19% !! > iii S GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like to sell to you. The bond matures in 10 years, has a face value of $1,000 and a coupon interest rate of 6% (paid annually). If you know that the yield to maturity on similar bonds is 8%, what is the maximum price you would be willing to pay for the bond? a $865.80 b. $940 C. $1000 d. $1,147.20 10. SAT-Corp. is considering the purchase of a new piece of machinery that will cost them $1,800,695 today (in 2010). This piece of machinery, however, will increase the company's after-tax cash flows by $500,000 in 2011, $750,000 in 2012, $1,000,000 in 2013. If SAT-Corp. 's discount rate (WACC) is 10%, then the NPV of making this purchase is a $449,305 b $243,896 © $25,000 d $1,760,00 11. What is the internal rate of return of a project costing $3,000, having after-tax cash flows of $1.500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1.500 cash flow? (rounded to the nearest percentage) a 13% b 15% c. 16% d. 19% !! > iii S
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Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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