What is equivalent annual cost

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1. Air conditioning for a college dormitory will cost $1.8 million to install and $200,000 per year to operate. The system should last 25 years. The real cost of capital is 5%, and the college pays no taxes. What is the equivalent annual cost?

2. The price of a zero-coupon bond with 12 years to maturity is 506.4816. What is its yield-to-maturity? Please show work

3. A 15 year bond sells for $832.38 and yields 6.80% APR. What is the bond's coupon rate?

Reference no: EM132007427

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