If the Discount Rate Is Assumed to Be 8% and the Current

question 34

True/False

If the discount rate is assumed to be 8% and the current cash flow is $1.5 million and is expected to remain at that level in perpetuity, the implied valuation is $18.75 million.

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Definitions:

Classical Conditioning

A learning process in which an innate response to a potent stimulus becomes transferred to a previously neutral stimulus.

Latent Learning

A form of learning that occurs without any obvious reinforcement of the behavior or associations that are learned, often becoming apparent when there is an incentive to demonstrate it.

Instinctive Drift

Instinctive drift refers to the tendency of an animal to revert to instinctual behaviors even after learning new behaviors via operant conditioning.

Instinctive Drift

The phenomenon where established habits learned through operant conditioning start to revert to innate behavioral patterns.