Example of risk faced by government stakeholders

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Reference no: EM131991138

1. Madsen Motors's bonds have 20 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10.5%; and the yield to maturity is 8%. What is the bond's current market price? Round your answer to the nearest cent.

$___

2. Give an example of a risk faced by government stakeholders?

3. In the evaluation of projects, we utilize the relevant incremental aftertax cash flows. Since depreciation is a noncash expense, it should be ignored. Is this statement true or false? Justify your position.

4. In the textbook's capital budgeting examples, the book assumes that the firm recovers all of its working capital invested into a project. In the real world, is this a reasonable assumption?

Reference no: EM131991138

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