Question $26(2\mathrm{.}5$ points$)$

Davis Inc. has $5\%$ annual coupon bonds outstanding with a current price of $$900$ and

a par value of $$1,000.$ If there are $20$ years to maturity, what is the bond's yield$-$to$-$

maturity?

$5\mathrm{.}00\%$

$5\mathrm{.}86\%$

$5\mathrm{.}31\%$

$3\mathrm{.}85\%$

$4\mathrm{.}25\%$

Question $27(2\mathrm{.}5$ points$)$

Which one of the following is NOT an example of a capital budgeting decision?

Should the firm introduce a new service?

Should the firm build a new manufacturing facility?

Should the firm replace old equipment with newer, more efficient, equipment?

Should the firm issue bonds?

Should the firm launch a new product?