XYZ, Inc. recently issued $5,000 par value, 30 year bonds with a 6% coupon rate paid semiannually with warrants attached.These bonds were issued at par at a time when the nominal going rate of interest on comparable bond issues was 8%.What is the implied value of the warrants, rounded to the nearest whole dollar, associated with this bond issue?

A.$775

B.$1,131

C.$1,126

D.$225

XYZ, Inc. is considering a 5 year, 12% WACC capital budgeting project under three scenarios.If conditions are excellent, the cash flows from this project are expected to be $4,000 per year; under fair conditions, cash flows are projected at $2,500 per year; and under unfavorable conditions, cash flows are projected at ($600) per year.The initial investment outlay is $3,000 and the probabilities of these three conditions are 30%, 50% and 20%, respectively.Assume that XYZ has the option to abandon this project in the second year if conditions are unfavorable.It could do so by selling this project to another company at a price of $1,500 in year 2 and consequently cash flows would be 0 in years 3 and beyond.Calculate the standard deviation given the abandonment option.

A.$5,766.51

B.$6,766.51

C.$3,766.51

D.$4,766.51

XYZ, Inc. manufactures watches.Each watch sells for $20 and variable costs are $10/watch.The fixed cost is $100.Calculate the breakeven quantity.

A.$10

B.15 watches

C.$15

D.10 watches

XYZ, Inc. is considering a 5 year, 12% WACC capital budgeting project under three scenarios.If conditions are excellent, the cash flows from this project are expected to be $4,000 per year; under fair conditions, cash flows are projected at $2,500 per year; and under unfavorable conditions, cash flows are projected at ($600) per year.The initial investment outlay is $3,000 and the probabilities of these three conditions are 30%, 50% and 20%, respectively.Assume that XYZ has the option to abandon this project in the second year if conditions are unfavorable.It could do so by selling this project to another company at a price of $1,500 in year 2 and consequently cash flows would be 0 in years 3 and beyond.Calculate the expected NPV of this project given the abandonment option.

A.$8,963.72

B.$6,963.72

C.$5,963.72

D.$7,963.72