1. Micalah's Crafts needs $225,000 today to purchase some new equipment. They are planning on issuing 10-year bonds with a 8% coupon rate and semi-annual interest payments. The current market rate of interest is 6.5%. How many bonds must Micalah's Crafts sell to raise the money they need? 216 a. b. 225 C. d. 231 203 234 e. 2. Projects C and D are mutually exclusive and have normal cash flows. Project C has a higher NPV if the WACC is less than 12%, whereas Project D has a higher NPV if the WACC exceeds 12%. Which of the following statements is CORRECT? a. The crossover rate between the two projects is above 12%. b. Project C probably has a faster payback. c. Project D has a higher IRR. d. Project C has a higher IRR. e. The crossover rate between the two projects is below 12%. 3. Aubey Inc. is considering two projects that have the following cash flows: Project 1 Cash Flow Project 2 Cash Flow Year -$1,900 -$2,000 1,100 900 500 700 800 800 3 600 1,000 4 1,100 400 At what cost of capital would the two projects have the same net present value? 4.73% 6.70% 7.50% 8.20% 5.85% a. b. c. d. e