Originating lenders contribute to the financial crisis

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1. A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year Cash Flow 0 –$ 28,700 1 12,700 2 15,700 3 11,700 If the required return is 15 percent, what is the IRR for this project?

2. How did originating lenders contribute to the financial crisis?

3. Explain the rationale for why anyone would choose to buy a zero coupon bond that pays no interest prior to maturity and pays only the face value of the bond at maturity.

Reference no: EM132002682

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