(Answered) You have an opportunity to buy a bond with a face value of

Engineering

You have an opportunity to buy a bond with a face value of $10,000 and coupon rate of 14%, payable semi-annually. NOTE: Interest per 6-month period is 7% of Face Value (i.e. $10,000x0.07 = $700 per 6-month period).

(i) If the bond matures in five years and you can currently buy one for $3,500, what is your IRR for this investment?

(ii) If your MARR for this type of investment is 20%, should you buy the bond?

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