1. Show work not on excel: ABC Co.'s Class K bonds have a 12-year maturity, $1,000 par value, and a 4.50% coupon paid semiannually (2.875% each 6 months), and those bonds sell at their par value. ABC's Class P bonds have the same risk, maturity, and par value, but the P bonds pay a 4.5% annual coupon. Neither bond is callable. At what price should the annual payment bond sell?
2. What is the internal rate of return for a project that requires an initial investment of $85,317 and then generates cash flows of $20,507 per year for 7 years? Round to the nearest whole %.