1- When you retire 20 years from now, you want to have $2 million. You think you can earn an average of 8 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 4 years from today. How much more will you have to deposit as a lump sum if you wait for 4 years before making the deposit? ,,,,,,,,,2. The bonds issued by Jensen & Son bear a 8 percent coupon, payable semiannually. The bond matures in 8 years and has a $1,000 face value. Currently, the bond sells at par. What is the yield to maturity? ,,,, ,,,,,,,3- Wine and Roses, Inc. offers a 12 percent coupon bond with semiannual payments and a yield to maturity of 10 percent. The bonds mature in 11 years. What is the market price of a $1,000 face value bond? ,,,, ,,,4- 301 Finance is looking at a new pizza machine that will cost of $200,000. At the end of the project five years life the pizza machine can be scrapped for $40,000. The pizza machine will generate $80,000 per year for the next five years in operating cash flows. 301 Finance required rate of return is 8 percent.,,a) What is the NPV of the project? , b) What is the IRR of the project? ,,,,5. How many diverse securities are required to eliminate the majority of the diversifiable risk from a portfolio? ,A. 5,B. 10,C. 32,D. 50,E. 75,, ,,,,,,,,
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