An Investor Is Considering a Short-Term Investment in a Resort

question 53

Multiple Choice

An investor is considering a short-term investment in a resort property on a Caribbean island. If the weather is reasonably stable over the next year, the value of the investment is expected to be $1.2 million; however, if this proves to be a heavy hurricane year, the value is expected to be $0.5 million. According to the experts, there is a 40% chance that this will be a year of many hurricanes.
-Refer to the information above. If the appropriate expected rate of return is 15%, what is the maximum amount the investor should invest?

• A)$800,000
• B)$678,000
• C)$1,043,479
• D)$739,000

---

Definitions:

Self-Service Systems

Self-service systems are interactive platforms that allow users to perform tasks or access services independently, often via technology solutions.

Compensation Data Systems

Systems designed to collect, store, and analyze data regarding employee compensation, including wages, benefits, and bonuses, to ensure equitable and competitive compensation practices.

HR Mobile Apps

Mobile applications designed to facilitate human resource management tasks and processes for employees and managers.

Vacation Time

Allocated period during which an employee is allowed to be away from their job while still receiving pay.