1. Please describe the relationship between bond prices, interest rates, par value, and coupon rates. And comment on the reasons that interest rates/yield to maturity on bonds change over time.
2. LaVerne Solar Inc. has sales of $500,000, cost of goods sold of $263,000, and accounts receivable of $60,000. How long on average does it take the firm’s customers to pay for their purchases?
3. How much must you deposit each year into your retirement account starting now and continuing through year 9 if you want to be able to withdraw $80,000 per year forever, beginning 31 years from now? Assume the account earns interest at 12% per year.
The amount to be deposited is determined to be $.