-Refer to the Figure What Is the Net Present Value of the Investment?
A)

question 79

Multiple Choice

$$\begin{array} { l r } \text { Initial cost } & \$ 200,000 \\\text { Annual net cash inflows } & \$ 25,000 \\\text { Expected life } & 10 \text { years } \\\text { Salvage value } & \text { none }\end{array}$$
-Refer to the Figure.The company requires a minimum rate of return of 4%.The present value of an annuity of $1 in arrears for 4% for 10 years is as follows: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | } \hline \text { Period } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\\hline 4 \% & 0.962 & 1.886 & 2.775 & 3.630 & 4.452 & 5.242 & 6.002 & 6.773 & 7.435 & 8.111 \\\hline\end{array}$$ What is the net present value of the investment?

• A) ($81,830)
• B) $2,775
• C) $118,170
• D) $202,775

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Definitions:

Classical Conditioning

A teaching approach where an association is made between a stimulus found in the environment and one that happens inherently.

Nature

The phenomena of the physical world collectively, including plants, animals, the landscape, and other features and products of the earth.

Modeling

The process of learning by observing and imitating the behaviors, attitudes, or emotional expressions of others.

Psychoanalytic Perspective

A theory and approach to psychology and human behavior emphasizing unconscious motivations and early childhood experiences in shaping personality and behavior.