Use the Information for the Question(s)below

question 7

Multiple Choice

Use the information for the question(s) below.
You own a small manufacturing plant that currently generates revenues of $2 million per year.Next year,based upon a decision on a long-term government contract,your revenues will either increase by 20% or decrease by 25%,with equal probability,and stay at that level as long as you operate the plant.Other costs run $1.6 million per year.You can sell the plant at any time to a large conglomerate for $5 million and your cost of capital is 10%.
-If you are awarded the government contract and your sales increase by 20%,then the value of your plant will be closest to:

• A)$5 million.
• B)$8 million.
• C)$0.
• D)$4 million.

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Definitions:

Assassinated

refers to the act of deliberately killing someone, especially a prominent or public figure, for political or ideological reasons.

Eidetic Imagery

The ability to recall images, sounds, or objects in memory with high precision for a few minutes without using mnemonics; often referred to as photographic memory.

Analogy

An examination of the similarities or differences between two items, usually to explain or make something clearer.

Photograph

An image created by light falling on a photosensitive surface, usually photographic film or an electronic sensor, capturing a visual moment.