Your Firm Intends to Finance the Purchase of a New

question 102

Multiple Choice

Your firm intends to finance the purchase of a new construction crane.The cost is $2,500,000.What is the size of the first payment if the crane is financed with an interest-only loan at an annual rate of 7.50%?

• A)$187,500.00
• B)$127,500.00
• C)$3,391,475.16
• D)There is not enough information to answer this question.

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Definitions:

Representativeness Heuristic

A cognitive shortcut where an individual assesses the probability of an event based on how similar it is to the typical case.

Fundamental Attribution Error

The tendency to overemphasize personal traits and underemphasize situational factors when explaining others' behavior.

Situational Causes

Factors external to an individual that are viewed as causes for behavior.

Heuristics

Simplified strategies or shortcuts used to make decisions and solve problems more efficiently.