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Li can earn 5 percent on her investments, how much must she deposit at
the end of each year?
12. Hayley makes annual end-of-year payments of $6,260.96 on a fiveyear loan with an 8 percent interest rate. The original principal amount
was
13. Hewitt Packing Company has an issue of $1,000 par value bonds
with a 14 percent annual coupon interest rate. The issue has ten years
remaining to the maturity date. Bonds of similar risk are currently
selling to yield a 12 percent rate of return. The current value of each
Hewitt bond is ________.
14. Yong Importers, an Asian import company, is evaluating two
mutually exclusive projects, A and B. The relevant cash flows for each
project are given in the table below. The cost of capital for use in
evaluating each of these equally risky projects is 10 percent.
Project A Project B
Initial Investment $350,000 $425,000
Year Cash Inflows (CF)
The NPVs of projects A and B are ________.
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FIN 419 Week 1 DQ 1

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