Please help with the following questions

CMO security offering with sequential pay tranches coupon rate amount issued Mortgage pool CMO classes M ortgages $100,000,000 Class A Bonds 3.50% $30,000,000 5% interest rate Class B Bonds 4% $30,000,000 5 year maturity Class Z Bonds 5% $30,000,000 Total bonds $90,000,000 Total assets $100,000,000 Equity contribution by issuer $10,000,000 Total debt and equity $100,000,000 Rules of cash distributions to A, B and Z: interest is paid currently on tranches A and B, but it is not paid on tranche 2 until principal on the other tranches is repaid. For tranche Z, interest will be accrued and accumulated into the investment balance. In addition, to ensure that the maturity of tranche A securities is kept relatively short, the interest accrued to tranche Z and all current principal and prepayments from the entire mortgage pool will be allocated to tranche A, and then to tranche B. Questions [30 points for each question] 1. Suppose that there are no prepayment and no default, what are the cash ows for Class A, Class B and Class Z bonds? What is the IRR for the issuer? 2. Suppose that there are 15% prepayment and no default, what are the cash ows for Class A, Class B and Class Z bonds? What is the IRR for the issuer