-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:

Projective Test

A type of psychological test in which the subject’s responses to ambiguous or unstructured material are analyzed to uncover underlying attitudes, emotions, or personality traits.

Longitudinal Study

A research method that studies the same participants multiple times over a period of time.

Archival Study

A method of research using existing records or documents to gather data and analyze trends or patterns.

Clinical Interview

A method used in psychology and psychiatry that involves asking questions and engaging in a conversation with a client to assess their mental health status.