Use the Information for the Question(s)below

question 32

Multiple Choice

Use the information for the question(s) below.
Larry the Cucumber has been offered $14 million to star in the lead role of the next three Larry Boy adventure movies.If Larry takes this offer,he will have to forgo acting in other Veggie movies that would pay him $5 million at the end of each of the next three years.Assume Larry's personal cost of capital is 10% per year.
-Larry should:

• A)reject the offer because the NPV < 0.
• B)accept the offer even though the IRR < 10%,because the NPV > 0.
• C)reject the offer because the IRR < 10%.
• D)accept the offer because the IRR > 0%.

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Definitions:

Isotope

Variants of an element that contain the same number of protons but different numbers of neutrons in their nuclei.

Neutrons

Subatomic particles, found in the nucleus of an atom, that have no electrical charge and a mass slightly larger than that of protons.

Element

A substance that cannot be broken down into simpler substances by chemical means and is made up of atoms all with the same number of protons.

Isotope

Variants of a particular chemical element which differ in neutron number, and consequently in mass, but not in electrical charge.