16) Which of the following statements is false? A) A debenture would usually be more risky than a mortgage bond that is issued by the same firm. B) Interest rates and bond prices usually move in the same direction C) A short-term bond will fluctuate less in value than a long-term bond if interest rates fluctuate. return is more than the bond's coupon rate. me that you wish to purchase a 30-year bond that has a maturity D) A bond will sell at a discount if the prevailing required rate of 17) Assu value of $1,00-and a coupon interest rate of 9.5%, paid semiannually. If you require a 6.75% rate of return on this investment, what is the maximum price that you should be willing to pay for this bond? A) $1,000 B) $675 C) $1,450 M 2 ,000 E) $1,352 18) Green Company's common stock is currently selling at $24.00 per share. This year the company plans to pay a dividends of $1.92 per share and projects that dividends will growth at a rate of 4%. At this rate, what is the stock's expected rate of return? A) 8.80% B) 4.08% C)8.00% D) 12.00% 19) You are evaluating the purchase of Cool Toys, Inc. common stock that just paid a dividend of $1.80. You expect the dividend to grow at a rate of 12%, indefinitely. You estimate that a required rate of return of 17.5% will be adequate compensation for this investment. Assuming that your analysis is correct, what is the most that you would be willing to pay for the common stock if you were to purchase it today? A) $51.55 B) S36.65 C) $91.23 D) $74.82 20) You have been asked to analyze a capital investment proposal. The project's cost is $2,775,000. Cash inflows are projected to be $925,000 in Year 1: $1,000,000 in Year 2;$1,000,000 in Year 3; $1,000,000 in Year 4: and $1,225,000 in Year 5. What is the project's IRR? A) 23.78% B) 19.16% C) 804% D) 16.75% 21) A machine has a cost of $5,375,000. It will produce cash inflows of 1,825,000 (Year 1): $1,775,000 (Year 2): $1,630,000 (Year 3), $1,585,000 (Year 4); and S 1.650000 (Year 5). At a discount rate of 16.25%, what is the NPV? A) $81,724 B) $416,912 C)$190,939 D) $257,106 22) A project costs $10,000 and is expected to return after-tax cash flows of $3,000 each year for the next 10 years. This project's payback period is A) three and one-third years. C) three years. B) four years. D) 10 years