Your Firm Is Considering a Project with a Five-Year Life

question 40

Multiple Choice

Your firm is considering a project with a five-year life and an initial cost of $260,000. The discount rate for the project is 14 percent. The firm expects to sell 3,600 units a year. The cash flow per unit is $30. The firm will have the option to abandon this project after three years at which time they expect they could sell the project for $150,000. You are interested in knowing how the project will perform if the sales forecast for years four and five of the project are revised such that there is a 60/40 chance that the sales will be either 2,800 or 4,400 units a year, respectively. What is the net present value of this project given your sales forecasts?

• A) $96,141
• B) $114,715
• C) $132,708
• D) $141,414
• E) $155,556

Describe the bias and subjectivity in trait and results-oriented methods.

Understand the time consumption and drawbacks of the essay method in performance evaluations.

Recognize the strengths and weaknesses of various performance evaluation approaches, including critical incident method and balanced scorecard.

Understand how performance is a function of ability, motivation, and environment.

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Definitions:

Mental Illness

Disorders that affect mood, thinking, and behavior, ranging from depression and anxiety to schizophrenia and bipolar disorder, affecting an individual's day-to-day functioning.

Sexual Fantasies

Imaginary sexual thoughts or desires that can influence arousal but do not necessarily involve intent to engage in sexual activity.

Psychological Disorders

Conditions characterized by abnormal thoughts, feelings, and behaviors that may cause distress or interfere with a person's ability to function.

Sexual Abuse

The act of subjecting someone to undesired or inappropriate sexual activities or conduct, typically involving coercion or force.