Andy Would Like to Buy a New Car but Must

question 67

Multiple Choice

Andy would like to buy a new car but must complete a two-year commitment to the Peace Corp before he will drive the new car.The current price of the car Andy wants to buy is $22,000,and the dealer expects the price of a similar new car to be $24,000 in two years.If Andy can earn an annual interest rate of 3% on his money,should he buy the car now or wait for two years? Why? Note: Storage costs if Andy purchases the car are $0.Please limit your considerations to the factors offered in the answer choices.

• A)Buy now because if Andy invests the $22,000 today it will only increase in value to $23,340,and this is less than the cost of his desired new car in two years.
• B)Andy is indifferent because his $22,000 investment will be worth exactly $24,000 after two years.
• C)Buy in two years because at $24,000 the car will cost less than the $24,385 Andy will have after investing the money for two years.
• D)Buy in two years because $24,000 is a real deal for the car Andy wants.

Identify the stages of psychosexual development and their associated fixations or conflicts.

Understand the concept and examples of different learning theories (e.g., classical conditioning, operant conditioning, cognitive learning, and social learning theory).

Identify and differentiate between types of learning such as latent learning, insight learning, and vicarious learning.

Recognize the role and types of reinforcers (primary and secondary) in the learning process.

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Definitions:

Inventory Holding Gains

Inventory holding gains are the increases in value of inventory the company holds due to price increases, not yet realized through sales.

Liquidation

The process of bringing a business to an end and distributing its assets to claimants, usually when the company is unable to meet its financial obligations.

LIFO

Last In, First Out, an inventory accounting method where the last items added to inventory are the first ones to be used or sold, affecting cost of goods sold and inventory valuation.

Replacement Cost

The cost to replace an asset with another of similar nature and quality in its current condition.