Grady Enterprises is looking at two project opportunities for a parcel of land that the company currently owns. The first project is a restaurant, and the second project is a sports facility. The restaurants projected cash flow is an initial cost of $1,500,000 with cash flows over the next six years of $200,000 (year one), $250,000 (year two), $300,000 (years three through five), and $1,750,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash outflow: initial cost of $2,400,000 with cash flows over the next four years of $400,000 (years one to three) and $3,000,000 (year four), at which point Grady plans to sell the facility. If the appropriate discount rate for the restaurant is 11% and the appropriate discount rate for the sports facility is 13%, using NPV to determine which project Grady should choose for the parcel of land. Find the NPV of both projects and then decide

Smith Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield to maturity for this bond is 10%

. a. What is the price of the bond if the bond matures in fifteen or twenty years?

b. What do you notice about the price of the bond in relationship to the maturity of the bond?