Use the Following Information to Answer the Question(s)below

question 94

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a debt-equity ratio of 1.8,an equity beta of 1.6,and a debt beta of 0.20.It is currently evaluating the following projects,none of which would change Nielson's volatility. (All amounts are in $millions. )
-Which of the following projects should Nielson Motors accept?

• A)1 only
• B)1,2,and 3 only
• C)1 and 4 only
• D)2,3,and 5 only

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Definitions:

Payroll Taxes

Taxes imposed on employers and employees, based on the wages paid to employees, used to fund social security and other programs.

Corporate Income Tax

A tax levied by governments on the profits earned by corporations and businesses.

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Circular-flow Model

A financial framework depicting the ongoing flow of cash, commodities, and productive inputs between businesses and the public within an economic system.