A Firm Is Evaluating an Investment Proposal Which Has an Initial

question 140

Multiple Choice

A firm is evaluating an investment proposal which has an initial investment of $5,000 and cash flows presently valued at $4,000. The net present value of the investment is ________.

• A) -$1,000
• B) $9,000
• C) $4,000
• D) -$4,000

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly presented together, eventually eliciting the same response.

Operant Behavior

Behavior that is controlled by consequences, including reinforcement or punishment, which alter the likelihood of the behavior being repeated.

Acquisition

The process of acquiring new information or learning new behaviors.

Extinction

In psychology, the gradual weakening and eventual disappearance of a learned response, typically as a result of the discontinuation of reinforcement.