Project with an Up-Front Cost at T=0 of $1500 Is

question 6

Multiple Choice

project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC) (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is approved by the Food and Drug Administration If the FDA rejects the competitive product, NPC's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPCThere is a 75% chance that the competitive product will be rejected, in which case NPC's expected cash flows will be $500 at the end of each of the next seven years (t = 1 to 7) There is a 25% chance that the competitor's product will be approved, in which case the expected cash flows will be only $25 at the end of each of the next seven years (t = 1 to 7) NPC will know for sure one year from today whether the competitor's product has been approved. NPC is considering whether to make the investment today or to wait a year to find out about the FDA's decision If it waits a year, the project's up-front cost at t = 1 will remain at $1,500, the subsequent cash flows will remain at $500 per year if the competitor's product is rejected and $25 per year if the alternative product is approvedHowever, if NPC decides to wait, the subsequent cash flows will be received only for six years (t = 2 ..7) .
Assuming that all cash flows are discounted at 10%, if NPC chooses to wait a year before proceeding, how much will this increase or decrease the project's expected NPV in today's dollars , relative to the NPV if it proceeds today?

• A) $77.23
• B) $85.81
• C) $95.34
• D) $105.94
• E) $116.53

Explain the mechanisms behind phantom limb sensations and their triggers.

Describe how environmental factors influence brain structure and function.

Understand the role of the hippocampus in spatial memory.

Define drug-induced behavioral sensitization and provide examples.

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Definitions:

Central Amygdala

A region in the brain's amygdala involved in processing emotions and fear-related learning.

Basolateral Amygdala

A region of the brain's amygdala involved in emotional processing, particularly fear and anxiety.

Prefrontal Cortex

The frontal part of the cerebral cortex involved in decision making, cognitive behavior, personality expression, and moderating social behavior.

Conditioned Stimulus

A formerly neutral stimulus that becomes capable of triggering a conditioned response after it is associated with an unconditioned stimulus.