CHAPTER 7 INSTRUCTIONS: Answer each letter in the following problems. Show work when necessary. Problem 3 a) Determine the market price of a $750,000, five-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. b) Jill Morris is presently leasing a small business computer from Eller Office Equipment Company. The lease requires 10 annual payments of $6,000 at the beginning of each year and provides the lessor (Eller) with an 8% return on its investment. Assuming the computer has a ten-year life and will have no salvage value at the expiration of the lease, what was the original cost of the computer to Eller? c) Carey Company owns a plot of land on which buried toxic wastes have been discovered. Since it will require several years and a considerable sum of money before the property is fully detoxified and capable of generating revenues, Carey wishes to sell the land now. It has located two potential buyers: Buyer A, who is willing to pay $700,000 for the land now, and Buyer B, who is willing to make 20 annual payments of $110,000 each. Assuming that the appropriate rate of interest is 10%, to whom should Carey sell the land? Show calculations