Chillingsworth Has a Neighbor, Shivers, Who Faces the Same Options

question 3

Multiple Choice

Chillingsworth has a neighbor, Shivers, who faces the same options for insulating his house as Chillingsworth.But Shivers has a larger house.Shivers's annual fuel bill for home heating is 900 dollars per year.Plan A will reduce his annual fuel bill by 15%, plan B will reduce it by 20%, and plan C will eliminate his need for heating fuel altogether.The plan A insulation job would cost Shivers 900 dollars, plan B would cost him 1,700 dollars, and plan C would cost him 9,900 dollars.If the interest rate is 10% and his house and the insulation job last forever, which plan is the best for Shivers?

• A)Plans A and B are equally good.
• B)Plan B.
• C)Plan A.
• D)Plan C.
• E)He is best off using none of the plans.

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Definitions:

Internal Qualities

Characteristics or traits that are inherent to an individual, often related to personality, values, or motivation.

Situational Factors

External influences that can affect the behavior and outcomes of individuals in any given context.

Incremental Mind-Set

A psychological perspective that abilities and intelligence can grow with time and effort.

Flexible Mind-Set

Refers to an individual's ability to adapt their thoughts, approaches, and strategies in response to changing environments and new information.