1. ABC Company offers a 5% coupon bond with a current market price of $850.25. The yield to maturity is 7.34%. The face value is $1,000. Interest is paid semiannually. What is the number of years until the bond matures?

2. ABC Company has 6 percent bonds outstanding that mature in 13 years. The bonds can be called in 3 years at a call price of $1150. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $993 each. What is the yield to call (YTC)? 

3. Project A requires an initial investment of $7,500 at t = 0.  Project A has an expected life of 4 years with cash inflows of $5,000, $4,500, $900, $2,000 at the end of Years 1, 2, 3, and 4 respectively.  The project has a required return of 15%.  What is the equivalent annual annuity?

4. Project A requires an initial investment of $7,500 at t = 0.  Project A has an expected life of 4 years with cash inflows of $5,000, $4,500, $900, $2,000 at the end of Years 1, 2, 3, and 4 respectively.  The project has a required return of 15%.  What is the equivalent annual annuity?

5. Over the past six years, a stock had annual returns of 10 percent, 5 percent, 7 percent, 8 percent, 2 percent, and -11 percent, respectively. What is the standard deviation of these returns?

6. A 12-year project is expected to generate annual sales of $294,798, variable costs of $37,508, and fixed costs of $59,154. The annual depreciation is $29,847 and the tax rate is 34 percent. What is the annual operating cash flow?

7. What is the NPV of this project if the required rate is 19%?

Year       CF

0          -$1,647
1           $1,011
2           $1,609
3           $2,310