An Ancient Building Was Known to Have Been Built 3

question 7

Multiple Choice

An ancient building was known to have been built 3 000 years ago.Approximately what proportion of Carbon-14 atoms are yet in the building's wooden framing compared to the number which were present at the time of its construction? (half life of ¹⁴C = 5 730 years)

• A)0.425
• B)0.500
• C)0.517
• D)0.696

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Definitions:

Unlevered Cost of Capital

The cost of capital for a company that has no debt, representing only the cost of equity.

Financial Leverage

The use of borrowed money (debt) to finance the acquisition of assets, with the expectation that the income or capital gain from the new assets will exceed the cost of borrowing.

Par Bonds

Bonds that are issued and redeemed at their face value, or par value, which represents the nominal or dollar value printed on the bond.

Expected Perpetual EBIT

The forecasted continuous earnings before interest and taxes that a company expects to generate over an indefinite future period, assuming a steady state of operations.