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You Are Planning to Produce a New Action Figure Called

question 5

Multiple Choice

You are planning to produce a new action figure called "Hillary". However, you are very uncertain about the demand for the product. If it is a hit, you will have net cash flows of $50 million per year for 3 years (starting next year) . If it fails, you will only have net cash flows of
$10 million per year for 2 years (starting next year) . There is an equal chance that it will be a hit or failure (probability = 50%) . You will not know whether it is a hit or a failure until the first year's cash flows are in. You have to spend $80 million immediately for equipment and the rights to produce the figure. If you can sell your equipment for $60 million once the first year's cash flows are received, calculate the NPV with the abandonment option. (The discount rate is 10%)

Know the importance of improving human resources in the quest for economic growth in developing countries.

Understand the factors contributing to economic growth and high per capita incomes in developed nations.

Understand the factors limiting saving in Developing and Vulnerable Countries (DVCs).

Comprehend characteristics and major obstacles to economic growth in DVCs.

Definitions:

Lower-Consensus Deviance

Behaviors that are not widely agreed upon as deviant by society, often involving acts that may be frowned upon by some but not considered criminal or immoral by others.

Public Consensus

General agreement or shared beliefs among a population or group on a specific issue or idea.

Constructionist Perspective

A theoretical viewpoint holding that social phenomena and categories are not natural but instead constructed through social processes, including the roles of power and social institutions.

Constructionists

Advocates of an approach or belief that concepts or identities are socially constructed rather than inherently fixed.