Bonds are often called by the firm prior to maturity

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Reference no: EM132071105

1. You want to buy a new sports car from Muscle Motors for $42,000. The contract is in the form of a 72-month annuity due at a 8.75 percent APR. Required: What will your monthly payment be?

$751.87

$761.36

$746.43

$731.50

$709.11

2. ___ bonds are often called by the firm prior to maturity.

a. Mortgage

b. Corporate

c. Floating rate

d. Callable

e. Municipal

3. You are building a new factory. You bought the land two years ago for $100; you believe that it is now worth $150, but there are no known buyers for the property. The plant will cost $250 to build. You expect to buy $150 of equipment and spend $35 installing it. What is the amount of the initial investment for capital budgeting purposes?

A) $435

B) $500

C) $535

D) $250

E) $585

Reference no: EM132071105

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