Answer:
E. Yes: The MIRR is 9.13 percent.
Explanation:
<em>The First Step is to Calculate the Terminal Value at end of year 4. </em>
Terminal Value (FV) = Sum of (PV x (1 + r) ^ 5 - n)
= $107,500 x (1.134) ^ 3 + $196,100 x (1.134) ^ 2 + $104,500 x (1.134) ^ 1 + -$92,700 x (1.134) ^ 0
= $156,764.47 + $252,175,97 + $118,503 - $92,700
= $434,743.44
<em>The Next Step is to Calculate the MIRR using a Financial Calculator :
</em>
- $287,500 CFj
0 CFj
0 CFj
0 CFj
$434,743.44 CFj
Shift IRR/Yr 9.13%
Therefore, the MIRR is 9.13%
.
Answer:
$2,706.16
Explanation:
The Price of the Bond is also known as its Present Value or PV.
This is calculated as follows :
FV = $10,000
N = 27 × 2 = 54
I = 4.9 %
P/YR = 2
PMT = $0
PV = ?
Using a financial calculator to input the value as above, the PV is $2,706.16
Therefore, the price of the bond is $2,706.16