1. Find the payback period for the following project: the discount rate 7% Project X Initial Outlay $16,900
Year 1 $5,455
Year 2 $5,440
Year 3 $5,681
Year 4 $8,366
2. Suppose you purchased a ten-year bond (face value = $1000) with 8% coupon rate at par value. The bond makes semiannual coupon payments. You hold the bond for 3 years, and sell the bond immediately after its sixth coupon payment is paid out. If the bond’s yield to maturity is 5% when you sell the bond. What is the sale price of the bond?
A. $1000
B. $1015.32
C. $1175.36
D. $1185.72