1. Consider a project that would change the way your company is doing business. Investing $100,000 would save your company $12088 a year forever. Calculate the NPV of this project if the risk-adjusted rate is 10%.

2. Calculate the bond equivalent yield and effective annual return on a jumbo CD that is 120 days from maturity and has a quoted nominal yield of 6.56 percent. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

Bond equivalent yield %

Effective annual return %