1. Suppose you have a 10% bond that pays annual coupon and with mature in 10 years. The face value is $1,000, and the yield to maturity on a similar bond is 8%. The bond is also convertible with a conversion price of 100. The stock is currently selling for $120. What is the minimum price of the bond?

2. You are considering a project that will require an initial outlay of $200,000. This project has an expected life of five years and will generate after-tax cash flows to the company as a whole of $60,000 at the end of each year over its five-year life. Thus, the free cash flows associated with this project look like this.

Given a required rate of return of 10% percent, calculate the IRR.