What is the minimum annual payment that you would accept

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Reference no: EM131830195

1. Someone offers to buy your car for four, equal annual payments, beginning 2 years from today. If you think that the present value of your car is $9,000 and the interest rate is 10%, what is the minimum annual payment that you would accept? How to solve this problem on BAII Plus

A. $2,839.24

B. $3,435.48

C. $3,123.16

D. $2,250

2. If a company's bonds are selling at a discount, then:

a. The YTM is the return investors probably expect to earn.

b. The YTC is probably the expected return.

c. Either a or b could be correct, depending on the yield curve.

d. The current yield will exceed the expected rate of return.

e. The after-tax cost of debt to the company will have to be less than the coupon rate on the bonds.

Reference no: EM131830195

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