An Investment with an Initial Cost of $15,000 Produces Cash

question 5

Multiple Choice

An investment with an initial cost of $15,000 produces cash flows of $5,000 annually for 5 years.At a discount rate of 10 percent,what is the discounted payback period?

• A)3.00 years
• B)3.21 years
• C)3.75 years
• D)3.89 years
• E)Never

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Definitions:

Desensitization

Desensitization is a psychological process through which an individual is made less likely to feel extreme responses towards a stimulus, often used in the treatment of phobias and anxieties.

Systematic Desensitization

A method in behavioral therapy aimed at decreasing fear and anxiety by slowly introducing the individual to the object or situation that causes their fear.

Overgeneralization

A cognitive distortion where an individual concludes a general rule or pattern from a single event or a small number of events.

Free Association

A psychoanalytic technique where the patient speaks freely about their thoughts, memories, and feelings, revealing the unconscious processes.