What is the effective annual yield on this investment

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Reference no: EM132018214

1. Stanley Hart invested in a municipal bond that promised an annual yield of 6.7 percent. The bond pays coupons twice a year. What is the effective annual yield (EAY) on this investment? (Round percentage to two decimal places.)

13.4%

6.81%

6.70%

None of the above

2. "A local delivery company has purchased a delivery truck for $12,000. The truck will be depreciated under MACRS as a five-year property. The trucks market value (salvage value) is expected to decrease by $2,800 per year. It is expected that the purchase of the truck will increase its revenue by $13,000 annually. The O&M costs are expected to be $4,100 per year. The firm is in the 40% tax bracket, and its MARR is 15.3%. If the company plans to keep the truck only two years, what is the net present worth?"

Reference no: EM132018214

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