Calculate the payback period for the project

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a. Complex System has an outstanding issue òf $1000 per-value bonds with a 12.5% coupon interest rate. The issue pays interest semi-annually and has 15 years remaining to its maturity date.

i. If bonds of similar risk are currently earning a 10% rate of return, how much should the Complex System bond sell today?

ii. If the required return at 12.5% instead of 10%, what would be the current value of Complex Systems' bond? Contrast this finding with your findings in part i) and discuss.

b. XYZ Corporation is considering a project with an initial investment of $50. The cash inflowso associated with the project are as follows: Suppose the cost of capital is 15%(t = 0.15),

i. Calculate the payback period for the project.

ii. Calculate the NPV of the project.

iii. Calculate the IRR for the project using a scientific calculator.

Reference no: EM132543795

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