If they want an effective return of 8 how much should they


1. A friend of yours is considering purchasing a 20-year $50,000 bond which also pays $100 a year in interest. If they want an effective return of 8%, how much should they offer for this bond?

2. A firm is considering a 15 year project that is expected to return NCFs of 12,000$ in each of the first 7 years and then 8000$ in each of the remaining 8 years. If the NINV is 75,000$, what is the Payback period? The firm's k is 7%. Show your work

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Financial Management: If they want an effective return of 8 how much should they
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