1. Truman Industries is considering an expansion. The necessary equipment would be purchased for $10. The expansion would require an additional $2 investment in net operating working capital. The company spent and expensed $3 on research related to the project last year. The company plans to use a building that it owns to house the project. The building could be sold for $7 after taxes and real estate commissions. What is the initial investment outlay?

$22

$12

$19

$15

2. Tony purchased a 20-year par value bond with semiannual coupons at a nominal annual rate of 8% convertible semiannually at a price of 1722.25. The bond can be called at par value 1100 on any coupon date starting at the end of year 15. What is the minimum yield that Tony could receive, expressed as a nominal annual rate of interest convertible semiannually?

A. 3.5%

B. 3.6%

C. 3.3%

D. 3.4%

E. 3.2%