1. Interest payments on a bond are $500 twice a year. If the bond interest rate is 5% per year compounded semiannually, the bond face value is:
a. $60,000
b. $10,000
c. $15,000
d. $20,000
2. Two mutually exclusive alternatives, A and B, are to be evaluated by the ROR method. The initial investment for alternative B is greater than that of alternative A. If the overall ROR of both alternatives A, and B, is greater than the MARR, then:
a. Select alternative A because it has a lower initial investment cost.
b. Select alternative B because it has a higher initial investment cost.
c. Conduct an incremental analysis and select A if the ROR of the increment exceeds the MARR
d. Conduct an incremental analysis and select B if the ROR on the increment exceeds the MARR.