You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 6.6 percent, compounded annually. End of year 1. $3,593 2. $3,607 3. $2,836 4. $396 What is the present value of this investment if 6.6 percent per year is the appropriate discount rate?

Total PV= $9,192.58

Explanation:

Giving the following information:

You can reinvest these cash flows at 6.6 percent, compounded annually. End of year 1. $3,593 2. $3,607 3. $2,836 4. $396

To calculate the present value, we need to use the following formula on each cash flow:

PV= FV/(1+i)^n

Cf1= 3,593/1.066= 3,370.55

Cf2= 3,607/1.066^2= 3,174.18

Cf3= 2,836/1.066^3= 2,341.18

Cf4= 396/1.066^4= 306.67

Total PV= $9,192.58

Claim phrase: Test scores are not enough to rank students as good or bad students.

Explanation:

Students must be classified by their ability to interpret, reason and develop arguments and solutions in the most varied scientific fields. It is these abilities that can classify a good student, however, tests encourage students to memorize concepts and not develop them in their minds and as we know. Forcing to memorize concepts does not promote good study and this is a very relative ability for each student, for this reason, many good students, with little ability to decorate receive low test scores, while many bad students, with great ability to decorate receive good test scores, but do not know how to reason logically.

Of course, the good reasoning ability of good students should be sufficient to supply the inability to memorize concepts, but it is important that schools encourage critical thinking and discourage the act of decorating to create good students.