Ch. 6: Questions 2 & 20( Questions and Problems section)
2. Present Value and Multiple Cash Flows [ LO1 ] Investment X offers to pay you $ 4,700 per year for eight years, whereas Investment Y offers to pay you $ 6,700 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent?
20. Calculating Loan Payments [ LO2, 4 ] You want to buy a new sports coupe for $ 79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?
• Ch. 7: Questions 3 & 11( Questions and Problems section)
3. Valuing Bonds [ LO2 ] Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose