A Company Projects an Increase in Net Income of $135,000

question 11

Multiple Choice

A company projects an increase in net income of $135,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment?

• A) 15.0%
• B) 22.5%
• C) 30.0%
• D) 34.5%

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Definitions:

Traits

Characteristic patterns of thoughts, feelings, and behaviors that are relatively stable across time and situations, contributing to individual differences.

Personality Psychology

Personality psychology is the branch of psychology that focuses on the study of individual differences in characteristic patterns of thinking, feeling, and behaving.

Gordon Allport

A pioneering figure in psychology, known for his theory of personality that emphasized the uniqueness of the individual and the concept of personal dispositions.

Raymond Cattell

A psychologist known for his work in personality theory, including the development of the trait theory of personality.