Assume in 2009, an Investment of $2400 Was Made in a Bond

question 33

Multiple Choice

Assume in 2009, an investment of $2400 was made in a bond earning 9% compounded annually. Assume that the buyer pays at rate R and the annual rate of inflation is I.
Suppose in the year 2019, the value V of the investment in constant 2009 dollars is $V ( I , R ) = 2400 \left[ \frac { 1 + 0.09 ( 1 - R ) } { 1 + I } \right] ^ { 10 }$ . Calculate the function $V ( I , R )$ for $R = 0.06$ and $I = 0.05$ . Round your answer to the nearest cent.

• A) \(\$ 5,148.94\)
• B) \(\$ 3,319.05\)
• C) \(\$ 2,493.01\)
• D) \(\$ 2,479.09\)
• E) \(\$ 4,219.43\)

Grasp the fundamentals of the Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR) and their differences.

Comprehend the significance of the cost of capital in project evaluation and its calculation.

Recognize the challenges in evaluating mutually exclusive projects and the solutions to those challenges.

Understand the principles and application of the profitability index in investment decision making.

---

Definitions:

Outsourcing

The practice of hiring third parties to handle tasks traditionally performed within the company, often to save costs or access specialized expertise.

Payroll Administration

The process involved in managing the compensation of employees, including salary disbursement, tax withholding, and record-keeping.

Benefits Administration

This involves managing and overseeing an organization's employee benefits program, including health insurance, retirement plans, and other perks, ensuring compliance and satisfaction.

Employee's Skills

The abilities, knowledge, and competencies that individuals bring to their workplace roles, contributing to the organization's success.