A Car Dealership Offers a Car for $14,000,with Up to One

question 85

Multiple Choice

A car dealership offers a car for $14,000,with up to one year to pay for the car.If the interest rate is 7%,what is the net present value (NPV) of this offer to buyers who elect not to pay for the car for one year?

• A)$916
• B)$1896
• C)$13,084
• D)$14,000

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Definitions:

Degrees Of Freedom

The number of values in a statistical calculation that are free to vary.

Poisson Distribution

A probability distribution that models the number of times an event occurs in a fixed interval of time or space.

Null Hypothesis

A null hypothesis is a default position that there is no relationship between two measured phenomena or no difference among groups being compared in a statistical hypothesis test.

Expected Number

The predicted count or quantity based on probability calculations, often used in statistical analysis and planning.