Mountain Top Inn Has Total Assets Currently Valued at $478,500

question 102

Multiple Choice

Mountain Top Inn has total assets currently valued at $478,500. These assets are expected to be worth either $440,000 or $490,000 in one year. The company has a pure discount bond outstanding with a face value of $475,000 that matures in one year. Currently, U.S. Treasury bills are yielding 3.4 percent. What is the value of the equity in this firm?

• A) $13,660
• B) $18,975
• C) $0
• D) $15,890
• E) $16,822

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Definitions:

Primary Reinforcers

Innately satisfying stimuli that fulfill basic survival needs, such as food and water, and are therefore naturally effective in reinforcing behaviors.

Negative Reinforcement

Increasing behaviors by stopping or reducing aversive stimuli. A negative reinforcer is any stimulus that, when removed after a response, strengthens the response. (Note: Negative reinforcement is not punishment.)

Punishment

An event that tends to decrease the behavior that it follows.

Positive Punishment

An operant conditioning principle where a response is followed by a stimulus, leading to a decrease in the likelihood of that response occurring in the future.