Suppose the cost of capital is 14% (show your calculations) i) Calculate the payback period for...

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Suppose the cost of capital is 14% (show your calculations) i) Calculate the payback period for the project. (1 mark) ii) Calculate the NPV of the project. (1 mark) iii) Calculate the IRR for the project using a scientific calculator. (4 mark) Question 3 a) ABC Corporation has an outstanding issue of $1000 per-value bonds with a 10% coupon interest rate. The issue pays interest semi-annually and has 16 years remaining to its maturity date. 1) ii) If bonds of similar risk are currently earning a 12% rate of return, how much should the ABC Corporation bond sell today? (1.5 marks) What is the percentage change in the price of the bond if the market yield suddenly decreases to 8%? (1.5+1=2.5 marks) b) XYZ Corporation is considering a project with an initial investment of $55. The cash inflows associated with the project are as follows: Year Expected cash inflows 20 2 15 3 40 Suppose the cost of capital is 14% (show your calculations) i) Calculate the payback period for the project. (1 mark) Suppose the cost of capital is 14% (show your calculations) i) Calculate the payback period for the project. (1 mark) ii) Calculate the NPV of the project. (1 mark) iii) Calculate the IRR for the project using a scientific calculator. (4 mark) Question 3 a) ABC Corporation has an outstanding issue of $1000 per-value bonds with a 10% coupon interest rate. The issue pays interest semi-annually and has 16 years remaining to its maturity date. 1) ii) If bonds of similar risk are currently earning a 12% rate of return, how much should the ABC Corporation bond sell today? (1.5 marks) What is the percentage change in the price of the bond if the market yield suddenly decreases to 8%? (1.5+1=2.5 marks) b) XYZ Corporation is considering a project with an initial investment of $55. The cash inflows associated with the project are as follows: Year Expected cash inflows 20 2 15 3 40 Suppose the cost of capital is 14% (show your calculations) i) Calculate the payback period for the project. (1 mark)