You want to invest $100 in a project whose cash flows have a duration of 4 years. You invest $10 of your own money and you borrow the rest by issuing 2-year notes with duration of 1.25 years and 7-year notes with duration of 6.5 years. Each note has a face value of $1. The unit price of each 7-year note is $1.20. How many 7-year notes do you issue? Round to the nearest integer.

You want to invest $100 in a project whose cash flows have a duration of 4 years. You invest $10 of your own money and you borrow the rest by issuing 2-year notes with duration of 1.25 years and 7-year notes with duration of 6.5 years. Each note has a face value of $1. The unit price of each 7-year note is $1.20. How many 7-year notes do you issue? Round to the nearest integer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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