1. Lazio Company has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 7.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,150. What is the bond’s nominal yield to call?

8.19%

8.41%

8.11%

8.34%

8.74%

2. Consider an asset that costs $316,800 and is depreciated straight-line to zero over its 9-year tax life. The asset is to be used in a 6-year project; at the end of the project, the asset can be sold for $39,600. Required : If the relevant tax rate is 31 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)

$57,057.00

$346,512.00

$27,324.00

$60,060.00

$63,063.00