9. Barquez Mines, Inc., is considering investing in Chide. It makes a bid to the government to participate in the development of a mine, the profits of which will be realized at the end of 5 years. The mine is expected to produce $5 million in cash to Barquez at that time. Other than the bid at the outset, no other cash flows will occur, as the government will reimburse the company for all costs. If Barquez requires a return of 20 percent, what is the maximum bid it should make for the participation right if interest is compounded

(a) annually?

@) semiannually?

(c) quarterly?

(d) continuously?

Booker Brown, Inc., has a 10 percent bond outstanding with 7 years remaining to maturity. Interest payments are semiannual, and the instrument's face value is $100.