You Have Two Bonds,both with a Face Value of $7,000

question 105

Multiple Choice

You have two bonds,both with a face value of $7,000.One of them matures one year from today,while the other matures one year after that.If the interest rate is 8 percent (0.08) per year,what is the difference in value between the two bonds?

• A)$480.11
• B)$578.52
• C)$317.46
• D)zero
• E)$925.92

Understand and calculate operating cash flows using different approaches (e.g., top-down, bottom-up).

Determine the effects of depreciation and changes in net working capital on project cash flows.

Identify and calculate equivalent annual cost (EAC) for different assets to assist in asset selection decisions.

Recognize and evaluate the effects of sunk costs, opportunity costs, and erosion costs in project analysis.

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