1. What calculation was plugged into excel to get the yield to maturity?
2. Suppose Randy Jones plans to invest $1,000. He can earn an effective annual rate of 5% on Security A, while Security B has an effective annual rate of 12%. After 11 years, the compounded value of Security B should be somewhat less than twice the compounded value of Security A. (Ignore risk, and assume that compounding occurs annually.)
3. If you borrowed $50,000 from Bank at 5% of interest rate and raised $50,000 from investors at 10% of cost of equity, are you going to accept this project? why?