The firm has bonds outstanding that mature in 10 years. The bonds have $1,000 pa

Question

The firm has bonds outstanding that mature in 10 years. The bonds have $1,000 par value, pay interest semiannually at a rate of 9%, and have a current selling price of $1,125. The yield to maturity on the bonds is:

a. 7.22%

b. 14.40%

c. 10.12%

d. 9%

The corporation is evaluating a project that will cost $150,000; it is expected to last for 8 years and produce before-tax cash flows, including depreciation, of $52,302 per year. If the firm's cost of capital is 14% and its tax rate is 40%, what is the project's IRR?

a. 12%

b. -5%

c. 14%

d. 8%

e. 13%

please help! showing some sort of calculation would also be really helpful.

Explanation / Answer

c. 10.12%

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