1.

Project I

Year	0	1	2	3	4	5	6	7	8	9	10
CF	-188,000	18,500	19,000	29,500	31,000	35,000	42,000	36,000	55,000	60,000	59,000

Project II

Year	0	1	2	3	4	5	6	7	8	9	10
CF	(188,000)	19,000	28,400	39,400	25,000	32,000	31,000	39,000	52,000	59,000	62,000

The firm is willing to accept any project that would produce a minimum rate of return of 4.89%. Which project do you recommend? why?

Please no excel answers

2. Manage a $200 million portfolio of corporate bonds. Your customers are concerned about the rate of return on corporate bonds. Based on the given situation (i.e., the interest rates are expected to fall), what adjustments should you make to your portfolio?