1. You are purchasing a bond with face value 1000 a coupon rate 12% paid semi annually and a maturity of 15 years. Investors are seeing 10% yield to maturity. What must you pay for it today?
2. You own a physical therapy clinic and come upon some exercise equipment for sale that would allow you to see more patients and generate extra cash flow $1000 each year over next three years. What are you willing to pay for this equipment if your discount rate is 8%