While Walking Down the Street You Are Approached by a Man

question 83

Multiple Choice

While walking down the street you are approached by a man with a gun who demands your money.According to the Schachter two-factor theory of emotion,you are most likely to conclude

• A) it is alright to be afraid in this situation.
• B) since your heart is pounding in this dangerous situation, you must be afraid.
• C) your heart is pounding because you are afraid.
• D) you are afraid because your heart is pounding.

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Definitions:

Payback Method

A capital budgeting technique that calculates the time required for an investment to generate cash flows sufficient to recover its initial cost.

Time Value of Money

The principle that holding money now is more valuable than possessing the same sum at a later date because of its current potential to generate earnings.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Net Present Value

An evaluation metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.