1. An investment project has the following cash flows: CFo = -$500 CF1 = $600 CF2 = $400 Assume that the firm's cost of capital and reinvestment rate are both 15%. What is the project's modified internal rate of return? Is the project acceptable?
2. A 30-year Treasury bond is issued with face value of $1,000, paying interest of $60 per year. What is the bond’s coupon rate?