Chadron Motors wants to raise $1.4 million by selling 15-year coupon bonds at par. Face value is $1,000. Comparable bonds in the market have a coupon rate of 5.4 percent, semiannual payments, 15 years to maturity, and are selling at 102.4 percent of par. What coupon rate should Chadron Motors set on its bonds?

• A. 5.17 percent
• B. 5.25 percent
• C. 5.50 percent
• D. 5.62 percent
• E. 5.40 percent

A project has projected cash flows of $141,900, $32,800, $64,200, $7,500 and $87,300 for Years 0 to 4, respectively. Should this project be accepted based on the combination approach to the modified internal rate of return if both the discount rate and the reinvestment rate are 9.15 percent? Why or why not?

• A. Yes; The MIRR is 8.05 percent.
• B. Yes; The MIRR is 9.23 percent.
• C. No; The MIRR is 8.05 percent.
• D. No; The MIRR is 9.23 percent.
• E. No; The MIRR is 9.06 percent.