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Reference: 10-04
The Finney Company is reviewing the possibility of remodelling one of its showrooms and buying some new equipment to improve sales operations. The remodelling would cost $120,000 now and the useful life of the project is 10 years. Additional working capital needed immediately for this project would be $30,000; the working capital would be released for use elsewhere at the end of the 10-year period. The equipment and other materials used in the project would have a salvage value of $10,000 in 10 years. Finney's discount rate is 16%.
-The discount rate used in net present value analysis should normally match or exceed the company's minimum required rate of return.
Primary Reinforcers
Innate rewarding elements such as food, water, or shelter, that satisfy biological needs and motivate behavior without prior learning.
Aversive Events
Unpleasant or harmful events or stimuli that an individual seeks to avoid or minimize.
Secondary Reinforcers
are stimuli that have become reinforcing through association with primary reinforcers, such as money being associated with food and comfort.
Tuition Reimbursement
A benefit offered by employers to cover part or all of the cost of their employees' education as an investment in workforce development.
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