1. One characteristic of the payback method of project analysis is the:
use of variable discount rates.
standardized cutoff point for cash flow consideration.
bias towards liquidity.
consideration of the risk level of each project.
discounting of all cash flows.
2. Gugenheim, Inc. offers a 8.75 percent coupon bond with annual payments. The yield to maturity is 4.775 percent and the maturity date is 9 years. What is the market price of a $1,000 face value bond?
$971.04
$1,358.34
$1,285.39
$628.21
$971.28