A New Computer Will Generate $1,000 in Net Revenue for a Firm

question 100

Multiple Choice

A new computer will generate $1,000 in net revenue for a firm during its first year,$500 during its second year,$250 during its third year,and nothing thereafter.If the interest rate is 10 percent (0.10) per year,what is the present value of the computer to the firm? (The first payment will be received at the end of this year. )

• A)$1,590.91
• B)$1,510.14
• C)$1,750.00
• D)$1,446.28
• E)$1,661.16

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Definitions:

Dependent Variable

A variable in an experiment or model that is expected to change in response to manipulations of the independent variable(s).

Independent Variable

The variable in an experiment that is manipulated or changed by the researcher to observe its effect on the dependent variable.

Criterion Variable

The dependent variable that researchers are interested in predicting or understanding in an experiment.

Positive Trend Line

A graphical representation indicating an increase or upward movement in data points over time.