You Are Considering the Purchase of an Investment That Would

question 14

Multiple Choice

You are considering the purchase of an investment that would pay you $5,000 per year for Years 1-5, $3,000 per year for Years 6-8, and $2,000 per year for Years 9 and 10. If you require a 14 percent rate of return, and the cash flows occur at the end of each year, then how much should you be willing to pay for this investment?

• A) $15,819.27
• B) $21,937.26
• C) $32,415.85
• D) $38,000.00
• E) $52,815.71

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Definitions:

Work Setting

The physical and social environment in which people perform their jobs, including the workplace layout, culture, and dynamics.

Expectancy Theory of Motivation

A psychological theory suggesting that individuals are motivated to act in certain ways based on the expected results of their actions.

Designated Goals

Clearly defined objectives that have been specifically appointed or marked for achievement by a person or a group.

Expectancy Theory

A psychological theory suggesting that people are motivated to engage in behaviors based on the expected outcomes and the value they place on those outcomes.