EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
8th Edition
ISBN: 8220103675437
Author: Blank
Publisher: YUZU
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Chapter 1, Problem 60APQ
To determine

Calculate the interest rate.

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A $20,000 collateral bond has a coupon rate of 7% per year payable quarterly. The bond matures 30 years from now. At a market interest rate of 7% per year, compounded semiannually, the amount and frequency of the bond interest payments is: (a) $1400 per year (b) $1400 per quarter (c) $350 per year (d) $350 per quarter
To finance a new project costing $45 million, a company borrowed $31 million at 16% per year interest and used retained earnings valued at 12% per year for the remainder of the investment. What is the company’s weighted average cost of capital for the project?
A bulk materials hauler purchased a used dump truck for $50,000 two years ago. The operating costs have been $5000 per month and revenues have averaged $7500 per month. The truck was just sold for $11,000. The rate of return is closest to: (a) 2.6% per month (b) 2.6% per year (c) 3.6% per month (d) 15.6% per year
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