Answer the Question. -Suppose You Are Constructing a Scale Model Solar System Using

question 125

Multiple Choice

Answer the question.
-Suppose you are constructing a scale model solar system using a scale ratio of 1 to 100 billion. In your scale model what will be the distance from Neptune to the Sun (in meters) ? The distance from
Neptune to the Sun is 4497 million km.

• A)0.4497 m
• B)4.497 m
• C)44.97 m
• D)0.04497 m

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Definitions:

Flexibility Option

An investment option that provides the holder with the ability to respond to changes in the financial market or business environment.

Surrogate Beta

Surrogate beta is a method used in finance to estimate the beta of a project or investment by using the beta of a similar, publicly traded company or project as a proxy.

Pure Play Method

A valuation technique that involves comparing the firm of interest to another company that has a single line of business similar to the target company.

Real Option

The right, but not the obligation, to undertake certain business initiatives, such as deferring, abandoning, expanding, staging, or contracting a project at a future date.