1. Problem-Solving for bonds: Calculate the present value of a bond that pays a coupon rate of 7% per year for 20 years, and matures in 20 years at its face value of $1000, using each of the following current market interest rates as the discount rate: (a) 5%; (b) 7%; (c) 9%. Show your calculations.
2. Performance Objective: Identify 2 criteria used in making a decision to lease, rather than buy, a real capital asset (e.g., machine or plant facility), and explain how each criterion can be efficiently used in making this decision.