From the Review re Week 7 about PV decisions Years Project X 5% Disc Disc.CFs Project Y 5% Disc Disc.CFs Year 1 $10,000 $9,000 Year 2 8,500 9,000 Year 3 9,500 8,500 Year 4 7,000 8,500 TOTAL $35,000 $ 35,000 Based on the PV comparison when a higher PV means that the discounted cash flows are different despite the total undiscounted cash flows are the same, we would recommendNormally the coupon rates stated on the face of a new bond a. is set to meet the market interest rate plus an inflation premium b. does not change over the life of the issue c. floats with changes in the prime rate d. is set just over the prevailing prime rate