(Ignore Income Taxes in This Problem

question 33

Multiple Choice

(Ignore income taxes in this problem. ) Sam Weller is thinking of investing $70,000 to start a bookstore.Sam plans to withdraw $15,000 from the business at the end of each year for the next five years.At the end of the fifth year,Sam plans to sell the business for $110,000 cash.At a 12% discount rate,what is the net present value of the investment?

• A)$54,075
• B)$62,370
• C)$46,445
• D)$70,000

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Definitions:

Marketing

The method of marketing, selling, and distributing goods or services, encompassing market analysis and promotion activities.

Selective Distortion

The process by which individuals perceive and interpret information in a way that is biased by their previously held beliefs.

Selective Retention

The process by which individuals remember information that is consistent with their beliefs and forget information that is not.

External Stimuli

These are factors or events in the external environment that can provoke a response or reaction from individuals or systems.