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A) Suppose you bought a bond with an annual coupon of 7 percent one year ago for $1,200. The bond sells for $1,245 today. Assuming

A) Suppose you bought a bond with an annual coupon of 7 percent one year ago for $1,200. The bond sells for $1,245 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate of return on this investment over the past year? If the inflation rate last year was 6 percent, what was your total real rate of return on this investment? B) Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 37,400 $ 37,400 1 19,750 7,300 2 15,270 13,800 3 12,750 20,270 4 9,750 24,270 a. What is the IRR for Project A? b. What is the IRR for Project B? c. If the required return is 10 percent, what is the NPV for Project A? d. If the required return is 10 percent, what is the NPV for Project B? e. At what discount rate would the company be indifferent between these two projects?

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