What Is the Present Value of the Following Cash Flow $$\begin{array} { l c c c c c } \text { Years: } & 0 & 1 & 2 & 3 & 4 \\\hline \text { CFs: } & \$ 0 & \$ 75 & \$ 225 & \$ 0 & \$ 300\end{array}$$

question 9

Multiple Choice

What is the present value of the following cash flow stream at a rate of 12.00%? $$\begin{array} { l c c c c c } \text { Years: } & 0 & 1 & 2 & 3 & 4 \\\hline \text { CFs: } & \$ 0 & \$ 75 & \$ 225 & \$ 0 & \$ 300\end{array}$$
?

• A) $546.24
• B) $402.03
• C) $436.99
• D) $511.28
• E) $441.36

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Definitions:

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.

Overconfidence

The state of being more confident than is warranted by the situation, often leading to taking undue risks.

Validity

The quality of being logically or factually sound; the extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Projection

A psychological defense mechanism where individuals attribute their own undesirable feelings, motivations, or characteristics to other people.