EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
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Chapter 7, Problem 53P

Determine the after-tax yield (i.e., IRR on the ATCF) obtained by an individual who purchases a $10,000, 10-year, 10% nominal interest rate bond. The following information is given: (7.7)

  • Interest is paid semi-annually, and the bond was bought after the fifth payment had just been received by the previous owner.
  • The purchase price for the bond was $9,000.
  • All revenues (including capital gains) are taxed at an income rate of 28%.
  • The bond is held to maturity.
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EBK ENGINEERING ECONOMY

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