Warrant further analysis as to the cause of the variance

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1. A new project has an investment of one million and it will generate a cash flow at the end of the first year of $632,000 and at the end of the second year $725,000. Calculate the IRR for this project.

2. Actual results generally vary from that budgeted. Using at least one example, which variances would you be most concerned about and warrant further analysis as to the cause of the variance.

3. What is the annualized modified duration (DMOD) of a 2-year bond with a 8.1% coupon rate (coupons paid semiannually), $1,000 par, and a yield of 8.5%? Round to four decimals.

Reference no: EM131913542

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