Which statement is true?

A Given a change in market interest rate, bonds with high coupon rates have greater price change than bonds with low coupon rates.

B The total value of a bond is equal to the interest payments plus the present value of the face amount.

C Given a change in market interest rate, longer term bonds have greater price change than shorter term bonds.

D A bond that is selling at discount has yield to maturity lower than the coupon rate.

Kramerica Industries has bonds with face value of $1,000 on the market making semiannual payments, with 10 years to maturity, and selling for $1,223.47. At this price, the bonds yield 6%. What is the coupon rate on Kramerica's bonds?

A 8 %

B 7%

C 9%

D 6%

Which one of the following is correct concerning the rules related to project analysis?

A The average accounting return calculated as a percentage of the sales generated by a project is the primary method in analyzing independent projects.

B The discounted payback period is biased towards long-term projects while the payback period is biased towards short-term projects.

C The net present value is less useful than the profitability index when comparing mutually exclusive project.

D A project with investing type cash flows is acceptable if its internal rate of return exceeds the required return.

Macrogates Industries bond has a 10% coupon rate and a $1,000 face value. Interest is paid annually, and the bond has 20 years to maturity. If investors require a 10% yield, what is the bond's value?

A $813

B $1123

C $1,000

D $849

Which of the following statements is true?

A The cash flows of a new project that result from a reduction in the cash flows from a firm's existing projects are called spillover effect.

B The most valuable alternative that is forfeited if a particular investment is undertaken is called a marginal cost.

C A pro forma financial statement is a financial statement that expresses all values as a percentage of either total assets or total sales.

D The change in a firm's future cash flows resulting from adding a new project is referred to as residual cash flows.