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hoa [83]
2 years ago
5

Perpetual Life Corp. has issued consol bonds with coupon payments of $50. (Consols pay interest forever and never mature. They a

re perpetuities.)a. If the required rate of return on these bonds at the time they were issued was 5.0%, at what price were they sold to the public
Business
1 answer:
forsale [732]2 years ago
3 0

Answer: $1,000

Explanation:

The price of a perpetual bond is calculated like a perpetuity and this is calculated by dividing the coupon payment of the bond by the prevailing required rate of return.

Price of this bond is:

= Coupon payment / Required return

= 50 / 5%

= $1,000

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Suppose you are evaluating two mutually exclusive projects, A and B. Project A costs $350 and has cash flows of $250 and $250 in
ki77a [65]

Answer:

The answer is 30%

Explanation:

Solution

Given that:

Project A

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Now what is the crossover rate for these projects.

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Year Project A    Project B A-B        B-A

0            -350     -300        -50        50

1             250      300        -50        50

2             250      100         150       -150

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So,

CF = CF1/(1+r)^1 + CF2/(1+r)^2

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r = 30%

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$50 = $50/(1+r)^1 + $-150/(1+r)^2

r = 30%

Hence, the cross over rate for these project is 30%

Note:

IRR =Internal rate of return

CF =Cash flow

r = rate

5 0
3 years ago
Explain how you would create a job requirements matrix for a job.​
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Answer:

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<u>The Five element of Self Leadership are </u>:-

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<u>Self-leadership Strategies includes</u>

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