1. Suppose there are two bonds for sale; Bond A with 7-years to maturity, paying a semi-annual interest payment of $57.75, and available for purchase at $1,017.63; and a second bond for sale at $989.54, maturing in 5-years, and paying $63.65 on a semi-annual basis. What is the YTM of the two bonds? And which one will you add to your portfolio based on the highest yield to maturity?

2. Given the following cashflows, calculate both the NPV and the IRR for a project with a 7% cost of capital.

Initial Outlay = $100,000

Year 1 = $50,000

Year 2 = $40,000

Year 3 = $30,000

Year 4 = $10,000