(Ignore Income Taxes in This Problem

question 24

Multiple Choice

(Ignore income taxes in this problem.) Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects:
Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's discount rate is 14%.
-The net present value of Project B is closest to:

• A) $77,805
• B) $127,805
• C) $55,005
• D) $105,005

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Definitions:

Psychological Factor

An element of human psychology that influences thoughts, feelings, and behaviors.

Etiology

The study of the causes or origins of disease or abnormal conditions, including factors contributing to the development of diseases.

Diathesis-Stress Model

A psychological theory that explains behavior as a result of a predispositional vulnerability together with stress from life experiences.

Biopsychosocial Approach

A comprehensive model that attributes health and illness to the combination of biological, psychological, and social factors.