Solve the Problem. -Don James Wants to Invest $63,000 to Earn $1547 Per

question 91

Multiple Choice

Solve the problem.
-Don James wants to invest $63,000 to earn $1547 per year. He can invest in B-rated bonds paying 3.9% per year or in a Certificate of Deposit (CD) paying 1.3% per year. How much money should be invested in each to realize
Exactly $1547 in interest per year?

• A) $29,000 in B-rated bonds and $34,000 in a CD
• B) $34,000 in B-rated bonds and $29,000 in a CD
• C) $35,000 in B-rated bonds and $28,000 in a CD
• D) $28,000 in B-rated bonds and $35,000 in a CD

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Definitions:

Variable Costs

Expenses that change in proportion to the production or sales quantities.

Operating Loss

A situation where a company's operating expenses exceed its gross profits or revenues, indicating a loss in its core business activities.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activities within a certain range.

Direct Labor Rate

The cost of wages paid to workers directly involved in the production of goods or services, often used in job costing.