Your company is evaluating a project. The project is expected to cost $500,000 and generate the following cash flows: 100,000 in year one, 300,000 in years two and three, & -50,000 in year four (end of life). If your cost of capital (WACC) is 10%, should you undertake this project?

Yes thank you

No

Not enough information

What is the value of a bond with 10 years to maturity and a 10% coupon rate if current interest rates for similar bonds are currently 13%?

What is the value of a bond with 10 years to maturity and a 10% coupon rate if current interest rates for similar bonds are currently 7%?

At maturity a bonds value always equals its par value.

True

False

A normal yield curve is?

Sloping upward

Flat

Sloping downward

Given what you know about intrinsic value, please calculate the intrinsic value of one ounce of gold.

The shape of the yield curve is drive by

Expectations about future inflation

Expectations about future cash flow

Perceptions about the relative risk of securities with different maturities

All of the above

A & C only.

Meacham Enterprises' bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?

What is the YTM in #89?

What is the Current Yield in #89?

Based upon your answers to question 89-91, do you think the corporation will call this bond?

Yes

No

help ! thank you!