BlueRidge Designs is considering the purchase of a security system. There are two options. The GEB7 costs $30,000 today, will cost $1,500 per year for eleven years to operate and will be sold for $6,000 in eleven years. The SJB4 costs $42,000 today, will cost $1,400 per year for thirteen years to operate and will be sold for $7,500 in thirteen years. The equivalent annual cost of the best choice is $_______. Use a discount rate of 6% p.a.

GlowStreet issued a bond, which pays semi-annually and has 25 years to maturity. Par value is $1,000, the market price is $919.44 and the yield to maturity is 8.00%. The bond's coupon rate is ______%.

Gekko Industries plans to issue a $1,000 par, semi-annual pay bond with 20 years to maturity and a coupon rate of 7.00%. The company expects the bonds to sell for $820.00. MC Inc's cost of debt is estimated to be _______%.

You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. You will begin to make withdrawals from the account the first month after you retire. If you plan to live an addition 25 years and leave $800,000 to your heirs, you will be able to withdraw $_____. (Note: you make 300 total monthly withdrawals from your retirement account.)

A firm is 65% equity and 35% debt. The firm's marginal tax rate is 40%. Their bonds trade for $990, mature in nine years, have a par value of $1,000, a coupon rate of 8.00% and pay semi-annually. The firm's common stock trades for $27 and just paid a dividend of $5.00. Dividends are expected to grow at 3% forever. The firm's after tax cost of debt is _____%.

A firm is 65% equity and 35% debt. The firm's marginal tax rate is 40%. Their bonds trade for $990, mature in nine years, have a par value of $1,000, a coupon rate of 8.00% and pay semi-annually. The firm's common stock trades for $27 and just paid a dividend of $5.00. Dividends are expected to grow at 3% forever. The firm's cost of equity is _____%.

An investment will pay $58,000 per year forever beginning 8 years from today. If the relevant rate is 10% compounded monthly, the investment is worth $______ today.