Coupon Bond

Question 1

Word Problems. Please answer the questions below. Be sure to show all work.

Problem 1 (6 points)

Garry plans to purchase a house listed at $500,000 in Thunder Bay and he will make a down payment of $200,000 and the rest of the money is financed by a 25-year mortgage from TD Bank. The mortgage rate is a 3.63% APR compounded semiannually. What is the monthly payment?

Problem 2 (5 points)

Titanic Cruises Ltd issued a 15-year semi-annual coupon bond with a 10% coupon rate, $1,000 face value. And now the market interest rate is 5%. What is the bond price today?

Problem 3 (7 points)

You are considering purchasing a share of What if Inc.. What if just paid a dividend of $1. Management predicts that dividends will grow at 10% per year for the next 8 years and then at 1% thereafter. The required rate of return for What if is 12% EAR. How much would you pay right now for a share of What if Inc.?

Question 2

A. Explain in detail what is meant by secondary packaging. Note: Carton, leaflet and label. (10 Marks)
B. The company plans to procure a new cartoning machine. Prepare a Pre Qualification Document to be issued to all of the potential Original Equipment Manufacturers (OEM), the machine vendors. Your Pre- Qualification Document must allow you to compare the OEM’s and generate a short-list. (20 Marks).
C. Equipment Selection: Generate a User Requirement Specification for procuring a new cartoning machine, that will be issued to the OEM’s. (20 Marks).
D. Generate a detailed flow chart of the various operations performed during an automated cartoning process. Include Activities and Inspection. (20 Marks).
E. For the secondary packaging line, list the Product Critical Quality Attributes (CQAs). (10 Marks)
F. List the requirements for Performance Qualification of the new cartoner. Explain and detail the process. (20 Marks)

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