Question 4

On August 15, 2000, the Canadian Government issued a bond maturing on February 15, 2030. The bond has a coupon rate of 6.75%, payable semi annually on 15 February and 15 August. If, on June 01, 2015 a $ 100 face value bond is selling for $115.00, what is the bonds yield to maturity using the following Excel functions. Show the detailed cash flow calculations (2 marks)

The PC Marketing Vice President suggested canceling the advertising campaign. If his opinion, the companys sales will not be reduced significantly due to the cancellation, what is the minimum quantity the company needs to sell in order to be profitable if the Vice Presidents suggestion is accepted? (2 marks) Clear Label Steps and show formulas on excel

1. XIRR (2 marks)
2. Yield (2 marks)
3. Show the calculation that will reconcile the difference in the YTM calculation between XIRR and Yield. (2 marks)
4. Presentation (2 marks)

Total Marks = 8