What Is the Maximum Price You Would Pay for an Investment

question 82

Multiple Choice

What is the maximum price you would pay for an investment that guarantees a payment of $1,000 a month beginning immediately lasts for 15 years and yields 12%?

• A) $84,155
• B) $100,000
• C) $62,832
• D) $83,262

Recognize the influence of physical and psychological characteristics on perception.

Grasp the concept of selective screening and its role in the perceptual process.

Understand the mechanisms of impression management and its importance in interpersonal interactions.

Comprehend the principles of attribution theory and its relevance in assessing events and behaviors.

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Definitions:

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, indicating the extra income earned over what could have been earned in the next best alternative.

Accounting Profits

The sales revenues minus the expenses of a firm over a designated time period, usually one year. Accounting profits typically make allowances for changes in the firm’s inventories and depreciation of its assets. No allowance is made, however, for the opportunity cost of the equity capital of the firm’s owners, or other implicit costs.

Zero

Zero is a numerical value representing the absence of any quantity or magnitude; it plays a central role in mathematics and economics.

Corporate Form

A legal structure for a business, recognized by law as separate from its owners, with its own rights, privileges, and liabilities.