You Are Considering the Purchase of an Investment That Would

question 71

Multiple Choice

You are considering the purchase of an investment that would pay you $5,000 per year for Years 1-5,$3,000 per year for Years 6-8,and $2,000 per year for Years 9 and 10.If you require a 14% rate of return,and the cash flows occur at the end of each year,then how much should you be willing to pay for this investment?

• A) $15,819.27
• B) $21,937.26
• C) $32,415.85
• D) $38,000.00
• E) $52,815.71

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Definitions:

Patellar Tendon

A strong tendon extending from the patella (kneecap) to the tibia, vital for knee extension and movement.

Motor Neurons

Nerve cells responsible for conveying signals from the spinal cord and brain to muscles, inducing movement.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem down the back, transmitting neural signals between the brain and the rest of the body.

Knee Jerk Reflex

A quick involuntary response involving muscle contraction, triggered by a tap on the tendon below the knee cap.