Use the Information for the Question(s)below

question 20

Multiple Choice

Use the information for the question(s) below.
Consider the following tax rates:

-In 2006,Luther Incorporated paid a special dividend of $5 per share for the 1 million shares outstanding.If Luther has instead retained that cash permanently and invested it into Treasury bills earning 6%,then the present value (PV) of the additional taxes paid by Luther would be closest to:

• A)$.35 million
• B)$2.90 million
• C)$1.75 million
• D)$5.85 million
• E)$3.25 million

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Definitions:

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, or praise, rather than personal satisfaction or interest.

Intrinsic Motivation

The drive to engage in an activity for its own sake and for personal satisfaction, rather than for some external reward.

Rewarding Act

An action that is positively reinforced, leading to the likelihood of the behavior occurring again in the future.

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment or social norms.