A firm with a 12 percent cost of capital is evaluating two projects for this year’s capital budget.  The projects’ expected after-tax cash flows are as follows: Year: 0 1 2 3 Project X: -$10,000 $4,800 $4,200 $3,400 Project Y: -$7,000 $2,900 $3,300 $3,700 If Projects X and Y are mutually exclusive, which one(s) should the firm adopt?

What is the present value of a security that will pay $8,000 in 25 years if securities of equal risk pay 4 percent annually?

What is the present value of a security that will pay $11,000 in 5 years if securities of equal risk pay 5 percent annually?

Martinez Motors’ bonds have 10 years remaining to maturity.  Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10 percent; and the yield to maturity is 10.5 percent.  What is the bond’s current market price?

Suppose you invest $1,800 today in an account that earns a nominal annual rate (inom) of 16 percent, with interest compounded semiannually.  How much money will you have after 11 years?

Kiev Corporation’s outstanding bonds have a $1,000 par value, a 7 percent semiannual coupon, 18 years to maturity, and an 11 percent yield to maturity (YTM).  What is the bond’s price?

Sweeney Sailboats’ bonds have 20 years remaining to maturity.  Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10 percent; and the yield to maturity is 9.5 percent.  What is the bond’s current market price?

Joe plans to retire in 22 years.  He currently has saved up $400,000, and he believes he will need $1,000,000 at retirement.  What annual interest rate must Joe earn to reach his goal, assuming he does not save any additional funds between now and retirement?

Wilson Corporation’s balance sheet has $45,000 total assets and $30,000 total liabilities. The firm nowhas 1,000 shares of common stock outstanding, and it sells at a price of $42.00 per share.  How much is MVA of WilsonCorporation?

What is the present value of a perpetuity that pays $3,800 per year if the discount rate is 5 percent?