You Are Currently at Time Period 0,and You Will Receive

question 88

Multiple Choice

You are currently at time period 0,and you will receive the first payment on an annual payment annuity of $100 in perpetuity at the end of this year.Six full years from now you will receive the first payment on an additional $150 in perpetuity,and at the end of time period 10 you will receive the first payment on an additional $200 in perpetuity.If you require a 10 percent rate of return,what is the combined present value of these three perpetuities?

• A) $2,349.50
• B) $2,526.85
• C) $2,685.42
• D) $2,779.58
• E) $2,975.40

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Definitions:

Exchange Theory

An analytical framework positing that social behavior is the result of negotiations between parties in an attempt to receive benefits at the lowest possible cost.

Social Interaction

The way people relate to one another and influence each other's behavior within a social context.

Attention

The mental focus or concentration directed towards a specific object, task, or activity.

Impression Management

The process by which individuals attempt to control the perceptions of other people about themselves, usually by adapting their behavior or appearance.