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    IRR for project and fair price for a Bond

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    It is unclear to me to determine what formula to use for the two problems and how to arrive to the answer step by step.

    1. A project has an initial outlay of $4,000. It has a single payoff at the end of year 4 of $6,996.46. What is the internal rate of return for the project (round to the nearest%)

    2. A Freddie Industries $10,000 bond was issued with a 6 percent coupon rate and will mature in 20 years. Assume that they pay the coupon payment once a year and the current market return for a similar bond is 7%. What is the fair price for this bond?

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    Solution Preview

    It is unclear to me to determine what formula to use for the two problems and how to arrive to the answer step by step.

    1. A project has an ...

    Solution Summary

    This hellps in estimating the IRR for project and fair price for a bond

    $2.19

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