Payback period/interest rate risk
Not what you're looking for?
Question 5
Wiley Corporation is considering a project which has up-front cost paid today at t=0. The project will generate positive cash flows of $85,000 a year at the end of each of the next five years. The project's NPV is $100,000 and the company's WACC is 10 percent. What is the project's simple, regular payback?
Question 6
Which of the following Treasury bonds will have the largest amount of interest rate risk (price risk) and why?
A. A 7% coupon bond which matures in 12 years
B. A 9% coupon bond which matures in 10 years
C. A 12% coupon bond which matures in 7 years
D. A 7% coupon bond which matures in 9 years
E. A 10% coupon bond which matures in 10 years
Purchase this Solution
Solution Summary
The solution explains two problems relating to payback period and interest rate risk
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Basics of corporate finance
These questions will test you on your knowledge of finance.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Lean your Process
This quiz will help you understand the basic concepts of Lean.