Net Present Value Is Being Used to Break the Tie

question 31

Multiple Choice

Net present value is being used to break the tie among four otherwise equal projects.If the interest rate is 4%,which of these anticipated four-year flows would yield the greatest net present value?

• A)$10,000 in year 1;$11,000 in year 2;$12,000 in year 3;and $13,000 in year 4
• B)$13,000 in year 1;$12,000 in year 2;$11,000 in year 3;and $10,000 in year 4
• C)$10,000 in year 1;$10,000 in year 2;$13,000 in year 3;and $13,000 in year 4
• D)$11,000 in year 1;$11,000 in year 2;$12,000 in year 3;and $12,000 in year 4

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Definitions:

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Iconic Memory

A type of visual sensory memory that holds an exact copy of the seen object for a very brief period of time.

Limbic System

Neural system (including the amygdala, hypothalamus, and hippocampus) located below the cerebral hemispheres; associated with emotions and drives.

Hippocampus

A region of the brain associated with memory formation, navigation, and emotional response.