1. A project will cost $20,000 in total investment. The cash flows are as follows: Year 1: $5,000; Year 2: $3,000; Year 3: $6,000; Year 4: $8,000; Year 5: $7,000. Assume the cash flows are distributed evenly throughout the year. Calculate the exact payback period.
A. 3 years
B. 3.40 years
C. 4 years
D. 3.75 years
2. What is the price of a bond which has a face value of $10,000, a maturity of 15 years, a coupon rate of 7% (paid semiannually), and a current yield in the market of 5%?
A. $10,000.00
B. $8,160.80
C. $10,500.00
D. $12,093.03