Q1) Briarcrest Condiments is spice-making firm. Newly, it developed new process for producing spices. Process needs new machinery which would cost $2,109,194 have a life of five years, and would make the cash flows given in the following table.
Year Cash Flow
1 $513,316
2 -225,749
3 1,000,114
4 849,873
5 758,037
Compute the NPV if discount rate is 13.74%?
Q2) Compute duration of 2-year Euro-note with $100,000 par value and annual coupon rate of 10%if today’s yield to maturity is 11.5%. Determine the duration be if today’s yield was 5.5%?