1. The Template Corporation is considering a project that provides a $0 annual cash inflow for the first five years and then provides $900,000 per year for the subsequent five years. The project requires an initial investment of $1.8 million. If the firm’s required rate of return for this project is 9.0 percent, what is the net present value?

$620,320

$560,750

$686,813

$515,221

$475,206

2. The Lumber Shack issued bonds that have exactly 9 more years until maturity with an 8 percent annual coupon rate. Interest is paid semiannually. If the bond is currently sold for $1,020 and has a par value of $1,000, what is its yield to maturity?

7.35 percent

7.69 percent

7.21 percent

7.41 percent

6.95 percent