Scenario 15.6: Consider the Following Decision That Eileen Has to Make

question 23

Multiple Choice

Scenario 15.6:
Consider the following decision that Eileen has to make:
Eileen is considering buying a $4000 computer for her daughter. Eileen hopes that with the computer her daughter's schoolwork will improve so much that in two years time she will be offered a full-ride scholarship to college. The scholarship is paid for four years and is valued at $25,000 per year. Even with the computer the probability that the scholarship will be awarded is 10%.
-Refer to Scenario 15.6. What formula shows the dollar stream expected from this purchase?

• A) -$4000 + $0 + $25,000 + $25,000 + $25,000 + $25,000
• B) $0 + $25,000 + $25,000 + $25,000 + $25,000
• C) $25,000 + $25,000 + $25,000 + $25,000
• D) -$4000 + $0 + $2500 + $2500 + $2500 + $2500
• E) $96,000

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Definitions:

Latent Memory Traces

Subconscious remnants of experiences that have been encoded into long-term memory but are not currently active or retrievable.

Ancestral Past

Refers to events, conditions, or genealogies related to one’s ancestors, influencing genetic traits and cultural or familial inheritances.

Oedipal Complex

A concept in psychoanalytic theory introduced by Sigmund Freud which posits a child's unconscious desire for the opposite-sex parent and jealousy toward the same-sex parent.

Mother

A female parent or guardian who provides care, protection, and guidance to her offspring.