Investment decision rules adjusts for time value of money

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Reference no: EM131317131

1. Which of the following investment decision rules adjusts for the time value of money?

A. Average Accounting Rule (AAR) B. Profitability Index C. Payback Period

2. Camille purchased a bond 5 years ago for $1,050. The bond paid $50 in annual interest and returned the $1,000 principal at the end of the fifth year. Camille used the interest payment to pay for college textbooks.

A) Her internal rate of return was exactly than 5%.

B) Her internal rate of return was greater than 5%.

C) Her internal rate of return was less than 5%.

D) Her internal rate of return cannot be determined.

Reference no: EM131317131

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