The Following Present Value Factors Are Provided for Use in This

question 181

Multiple Choice

The following present value factors are provided for use in this problem. $\begin{array} { | l | l | l | } \hline \text { Periods } & \text { Present value of } \mathbf { \$ 1 } \text { at } \mathbf { 8 \% } & \text { Present value of an annuity of } \mathbf { \$ 1 } \text { at } \mathbf { 8 \% } \\\hline 1 & 0.9259 & 0.9259 \\\hline 2 & 0.8573 & 1.7833 \\\hline 3 & 0.7938 & 2.5771 \\\hline 4 & 0.7350 & 3.3121 \\\hline\end{array}$
Xavier Co. wants to purchase a machine for $37,000 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are
$12,000 in each of the four years. What is the machine's net present value?

• A) $3,480.
• B) $(3,480).
• C) $40,480.
• D) $(2,745).
• E) $2,745.

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Definitions:

Cognitive Dissonance Theory

A theory proposed by Leon Festinger that explains the discomfort people feel when their beliefs, values, or behaviors are in conflict, leading them to seek consistency.

Role Playing

A technique in therapy and training settings where individuals act out roles to explore particular behaviors, attitudes, or social strategies.

Central Route Persuasion

A method of persuasion that involves high elaboration, where individuals pay close attention to arguments and are influenced by the strength and quality of those arguments.

Situational Dispositions

The tendency of individuals to behave in certain ways due to the influence of specific situational factors.