At the End of the Next Four Years,a New Machine

question 57

Multiple Choice

At the end of the next four years,a new machine is expected to generate net cash flows of $8,000,$12,000,$10,000,and $15,000,respectively.What are the cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation?

• A)$41,557.
• B)$47,700.
• C)$32,403.
• D)$38,108.

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Definitions:

Hans Selye

A pioneering Hungarian-Canadian endocrinologist who is known for his research on the stress response and for introducing the concept of General Adaptation Syndrome.

Meyer Friedman

A cardiologist known for co-developing the theory that the Type A behavior pattern increases the risk of heart disease.

Walter Cannon

A physiologist known for his work on the fight or flight response and contributions to understanding the autonomic nervous system.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through when exposed to stress.