Frank and Samantha Just Received a Large Inheritance When Samantha's

question 32

Multiple Choice

Frank and Samantha just received a large inheritance when Samantha's grandmother passed away. Samantha said she wanted to use the money to build an addition onto their house. Frank countered that he wanted to buy a more fuel-efficient car. Which of the following is true about this situation?

• A) This is an example of conflict because it involves an expressed struggle.
• B) This is an example of conflict because it involves scarce resources.
• C) This is an example of conflict because it involves incompatible goals.
• D) All of these are true.

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Definitions:

Time Value

The notion that money possessed today is more valuable than the same quantity in the future due to its potential to earn income.

Accounting Data

Financial information and records about a company's transactions used for reporting and analysis.

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, representing the discount rate at which the net present value of all the cash flows from a project equals zero.

Net Present Value

A method of evaluating the profitability of an investment, which calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.