Refer to the Following:
a Firm Is Considering Two Projects

question 8

Multiple Choice

Refer to the following:
A firm is considering two projects, A and B, with the following probability distributions for profit.
$$\begin{array} { c c c } \begin{array} { c } \text { Profit } \\\text { (\$1,000s) }\end{array} & \begin{array} { c } \text { Praject } A \\\text { Probability } ( \% ) \end{array} & \begin{array} { c } \text { Project B} \\\text { Prabability (\%) }\end{array} \\\hline \$ 20 & 10 & 10 \\40 & 15 & 15 \\{ 5 0 } & 50 & { 2 5 } \\{ 8 0 } & 15 & 40 \\100 & 10 & 10\end{array}$$
-What is the expected value of project B (in $1,000s) ?

• A) $60
• B) $65
• C) $70
• D) $75
• E) $80

Understand the relationship between money supply, inflation, and the purchasing power of money.

Recognize the role of commercial banks in the economy, including lending and profit generation.

Identify the challenges and potential issues associated with fiat money compared to commodity money.

Understand the principles of capital budgeting and the importance of cash flow over accounting profit.

---

Definitions:

Individualistic Cultures

Societies that emphasize the needs, goals, and desires of the individual over those of the group or collective.

Self-Esteem

One’s subjective evaluation of their own worth, including beliefs about oneself as well as an emotional states such as triumph, despair, pride, and shame.

Culture

A set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group.

Social Norms

Unwritten rules that govern the behavior of people in a society.