Figure 14-6.Present Value of $1

question 86

Multiple Choice

Figure 14-6.Present value of $1
Present value of an Annuity of $1

-Refer to Figure 14-6. Morgan Clinical Practice is considering an investment in new imaging equipment that will cost $400,000. The equipment is expected to yield cash inflows of $80,000 per year for a six year period. Morgan set a required rate of return at 10%. What is the net present value of the investment? (Note: there may be a rounding error depending on the table you use to compute your answer. Choose the answer closest to the one you calculate.)

• A) $51,600
• B) ($51,600)
• C) $348,400
• D) ($348,600)
• E) $451,600

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Definitions:

Diagnostic and Statistical Manual (DSM-IV)

A manual published by the American Psychiatric Association that outlines the standard criteria for the classification and diagnosis of mental disorders.

Psychological Disorders

Mental disorders characterized by patterns of thought, emotion, or behavior that are significantly distressing or impairing in social, work, or other important activities.

Antisocial Personality Disorder

A mental health disorder characterized by a long-term pattern of manipulating, exploiting, or violating the rights of others without any remorse.

Borderline Personality Disorder

A mental health disorder characterized by unstable moods, behavior, relationships, and self-image, often resulting in impulsive actions and problems in personal relationships.