What is present value of payments

Assignment Help Financial Management

Reference no: EM132057907

1. A bond with an annual coupon rate of 6.5%, maturing in 10 years at a value of $1,000 and a current market price of $899.35, will have a yield to maturity (using the approximation formula) of

A. between 8.5% and 10%.

B. between 7.5% and 8.5%.

C. between 5% and 6%.

D. between 6% and 7.5%.

2. Your company also wants to invest in a project. The new investment has a return of $750,000 after 4 years and the cost of the investment is $500,000. Your company's interest rate is 6%. The project offers $100,000 the first year, $200,000 the second year, and $150,000 for the third and fourth years. What is the Present Value of the payments and should your company invest in this project?

$459,500 No.

$689,750 Yes.

$517,300 Yes.

$498,750 No.

Reference no: EM132057907

Questions Cloud

Define health promotion activities for rural populations : In what ways might health promotion activities for rural populations differ from those designed for urban populations? Assume you are a community health nurse.

How much do you need to invest today : If you deposit money now, you can earn 7% per annum with a 50% probability, 6% with a 25% probability and 8% with a 25% probability.

What is administrative law : What is administrative law? How does administrative law affect companies?

Ensuring the law is fulfilling its purpose : If not, why not? What about businesses - do they have a role in ensuring the law is fulfilling its purpose?

What is present value of payments : Your company also wants to invest in a project. What is the Present Value of the payments and should your company invest in this project?

What important trends are critical to the firm : What important trends are critical to the firm's operations? Why?

Future value table or the future value : Find the future value and compound interest. Use the? $1.00 future value table or the future value and compound interest formula

Discuss the host countrys market along with retail market : Discuss the host country's market along with the retail market, including its structural features.

Describe the central features of the tuskegee study : Describe the central features of the tuskegee study. Assess the morality of the tuskegee study in light of the moral precepts outlined in the nuremberg code.

User Account

All Pages