Designs Now Is Opening a Showcase Office to Display and Sell

question 59

Multiple Choice

Designs Now is opening a showcase office to display and sell its computer-designed poster art. Designs expects cash flows to be $120,000 in the first year, $180,000 in the second year, $240,000 in the third year. If Designs uses 11 percent as its discount rate, what is the present value of the cash flows?

• A) $429,720
• B) $457,620
• C) $456,000
• D) $424,820

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Definitions:

Narcissism

A personality characteristic involving arrogance, self-centeredness, and a lack of empathy for others.

Acquaintanceship Effect

A phenomenon that suggests the more people know each other, the more they will like each other.

Boundary Condition

Conditions under which a theory or hypothesis holds true or a system operates within its intended parameters.

Hierarchy of Effects

A model describing the stages a consumer typically goes through when making a purchase decision, from awareness to knowledge, liking, preference, conviction, and finally purchase.