investing

posted by Mitch

A company is thinking of investing some surplus cash in 30 year $1000 face value Microsoft 6% annual coupon bonds. It plans to pay $925 each for 10,000 of them, now, and expects to SELL them for $1025 each at the end of 5 years.
Make a determination about the economic viability of the proposal using 3 capital budgeting methods

So how would we break this information down to figure out the simple payback, NPV and IRR using excel?

Respond to this Question

First Name

Your Answer

Similar Questions

  1. Finance

    A company is thinking of investing some surplus cash in 30 years $1000 face microsoft 6% coupon bonds. It plans to pay $925 each for 10,000 of them, now and expects to sell them for $1025 each at the end of 5 years. Make a determination …
  2. fin534

    In order to expand its business, Auto Parts Distributing, Inc., is considering the purchase of four pickup trucks at a total cost of $180,000. The company expects to keep these trucks for four years, then sell them. The company expects …
  3. math

    If a company issues bonds with a face value of $1000, a coupon rate of 7%, and that will mature in 10 years. The current market yield is 10%. if the bonds pay interest semiannually, what is the value of the bonds?
  4. investing

    You work for an insurance company. You have an obligation to pay $1 mln in exactly 1.5 years from today. Your goal is to provide the company with an immunized portfolio that would hedge the current obligation. The company is only interested …
  5. finance

    1. Yest Corporation's bonds have a 15-year maturity, a 7% semiannual coupon, and a par value of $1,000. The market interest rate (r) is 6%, based on semiannual compounding. What is the bond’s price?
  6. finance

    Sadik Inc.'s bonds currently sell for $1,270 and have a par value of $1,000/. They pay a $105 annual coupon and have a 15 year maturity, but they can be called in 5 years at $1,000. What is their yield to call (YTC)?
  7. Finance

    As an investor, you are considering an investment in the bonds of the Conifer Coal Company. The bonds, which pay interest semiannually, will mature in 8 years, have a coupon rate of 9.5% on a face value of $1,000. Currently, the bonds …
  8. accounting and finance

    5. What are the proceeds If a company issues 10 year bonds with a face value of $10,000,000 in bonds with a coupon rate of 7% and a market rate of 7.5% paying interest payments semi annually. Will they sell at a premium or a discount?
  9. engineering economics

    A) A company has issued 10-year bonds, with a face value of $1,000,000 in $1000 units. Interest at 8% is paid quarterly. If an investor desires to earn 12% nominal interest (compounded quarterly) on $10000 worth of these bonds, what …
  10. finance

    a company has an outstanding issue of 1,000 face value bonds with a 9.5% annual coupon and 20 years remaining until maturity. The bonds are currently selling at a price of 90 (90% of face value).

More Similar Questions