Sloan IncRecently Invested in a Project with a 3-Year Life Span

question 51

Multiple Choice

Sloan Inc.recently invested in a project with a 3-year life span.The net present value was $9,000 and annual cash inflows were $21,000 for year 1; $24,000 for year 2; and $27,000 for year 3.The initial investment for the project, assuming a 15% required rate of return, was $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 15 \% & \text { of } 1 \text { at } 15 \%\\1 & .870 & .870 \\2 & .756 & 1.626 \\3 & .658 & 2.283\end{array}$

• A)$45,792.
• B)$45,180.
• C)$29,232.
• D)$38,376.

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Definitions:

Coercive Power

A form of power that is based on the ability to deliver punishments or impose penalties for non-compliance or undesirable behaviors.

Psychological Research

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Referent Power

A form of influence based on the charisma and interpersonal appeal of the leader, leading others to admire and identify with them.

Capacity to Influence

The power or ability of an individual or group to sway or affect the decisions, behaviors, and opinions of others within an organizational or social context.