QUESTION $13$

Your firm is purchasing a new computer server that will last for five years. The firm can purchase the system for an upfront cost of $$400,000.$

Alternatively, you can lease the server from the manufacturer for $$8,000$ paid at the end of each month. The lease price is offered for a $60-$

month lease with no early termination$-$you cannot end the lease early. Your firm can borrow at an interest rate of $6\%$ per year with monthly

compounding. What is the PV of the lease.

A$.$ $$413,804\mathrm{.}49$

B$.$ $$216,808\mathrm{.}79$

C$.$ $$233,881\mathrm{.}22$

D$.$ $$569,887\mathrm{.}56$

QUESTION $14$

Assume the face value of the bond is $$1000.$ If a $7\%$ coupon bond is trading for $$975\mathrm{.}00$ the current yield is$?$

A$.7\mathrm{.}24\%$

B$.7\mathrm{.}18\%$

C$.8\mathrm{.}15\%$

D$.7\mathrm{.}00\%$