David Has Purchased an Investment That He Expects to Produce

question 25

Multiple Choice

David has purchased an investment that he expects to produce an annual cash flow of $3,000 for five years. He requires an 8% rate of return compounded annually. What is the maximum amount that David can pay and still earn the required rate of return?

• A) $19,008
• B) $15,000
• C) $14,764
• D) $12,936

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Definitions:

Sense of Identity

An individual's perception of themselves, including their beliefs, qualities, and expressions.

Erikson

Reference to Erik Erikson, a developmental psychologist known for his theory on psychosocial development across eight stages of human life.

Intuitionist Perspective

A philosophical viewpoint arguing that humans have an innate faculty that gives us an intuitive understanding of morality.

Moral Development

The process through which humans progress in their ability to reason about ethical and moral issues, often conceptualized through stages.