1. K Corporation Inc.'s bonds mature in 13 years, that were issued at par value and make coupon payments of 7%. The market interest rate for the bonds is 8.5%, semiannually. What is the price of the bond? What is the current yield? Is this a discount or premium bond and why?
2. In April, Candy Canes, Inc., buys $50,000 of raw materials, sugar and peppermint, and pays for them in May. In May it uses all of the raw materials to produces candy. Total cost of the candy is $ 100,000 and all costs are paid in May. All candy is sold to distributors in May for $150,000, but it does not receive payment until june. For each month, what are the firm's sales, net income, and operating cash flow?