Computed the npv of project using nominal values

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Reference no: EM132005757

1. An 8 percent annual coupon, noncallable $1,000 bond has ten years until it matures and a yield to maturity of 9.1 percent. What should be the price be?

2. Assume you computed the NPV of a project using nominal values. Your partner computed the NPV of the identical project using real values, given a positive rate of inflation. When you compare your results, you should discover that

O both computations used the identical discount rate.

O the discount rate used by your partner is higher than the rate you used.

O your NPV values are identical.

O your NPV value is greater than your partner’s NPV value.

O your partner’s initial cash flow at Time 0 is less than the value you used for Time 0.

Reference no: EM132005757

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