A Firm Knows That It Will Go Bankrupt If It

question 6

Multiple Choice

A firm knows that it will go bankrupt if it loses more than £10m on a project. The expected NPV is £16m, with a standard deviation of £13m. What is the Z- factor of the bankruptcy event?

• A) +2
• B) +7.5
• C) - 2
• D) - 0.31

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Definitions:

Feelings of Equity

Perceptions of fairness in treatment, rewards, and workload among individuals or groups.

Need for Achievement

The drive to excel, to achieve in relation to a set of standards, and to strive to succeed.

Affiliation

The connection or association between individuals or organizations based on shared interests or goals.

Socialized Power

A form of power that is utilized for the benefit of a group or society as a whole, rather than for individual gain.