1.Art purchased a new car for $18,000. His monthly payments are $488 for thirty six months. What is the annual rate of interest Art is paying on this loan?

2.The Company needs a new fork truck. There are 2 options for acquiring the truck. 1) It can sign a lease that would require monthly payments of $1,200 a month for 48 months after which time the fork truck is returned to the dealer, or, 2) it take out a bank loan which will require monthly payments of $1,200 a month for 60 months (based on a 6.5% APR) after which time the fork truck is expected to sell for $10,000. The Company uses a 10% discount rate to evaluate capital investment decisions. Determine the present value of these alternatives: lease & bank financing

3.Kennedy bought 15,000 shares of Duke Power series B $100 preferred stock that pays a $5 annual dividend for $1,478,500. What is Kennedy's annual yield on this investment?

4.Frank paid $99,450 for $100,000 of 15 year 4.5% tax free bonds on their date of issuance. He held the bonds for one year then sold the bonds to Maurice. Maurice purchased the bonds to yield 3.9%. What was Frank's cash gain or (loss) on the sale of these bonds.

5.The city of Omaha issued $5,000,000 of 30 year, 5% tax free bonds to update the city's water system. The city received $5,132,800 for the bonds on the date of issuance. What was the issuance price of the bonds?

6.Marco paid $975 for a $1,000, 3% bond with semiannual coupon payments that matures in 5 years. What is Marco's yield to maturity on this investment?

7.A large regional airport is planning to issue $15,000,000 of 15 year, 4% bonds that will pay annually. The proceeds will be used to update runways, taxiways and the ground transportation system. Market analysis indicates the bonds will sell to yield 4.25%. What amount of cash proceeds should the airport plan on receiving from the bond issuance?

8.A project has an initial cost of $8,600 and produces cash inflows of $3,200, $4,900, and $1,500 over the next three years, respectively. What is the discounted payback period if the required rate of return is 8%?