Project a Will Generate $10,000

question 109

Multiple Choice

Project A will generate $10,000.00 of revenue next year. Project B will generate $5,000.00 (50% probability) or $15,000.00 (50% probability) of revenue next year. Assuming both projects cost $8,000.00 and have a 10% APR discount rate, which project is preferred by a risk averse manager?

• A)Project A
• B)Project B
• C)Neither project
• D)Cannot be determined

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Definitions:

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Rules or directives made and maintained by an authority to regulate behavior or processes.

Patrol Officers

Law enforcement members who perform general policing duties such as patrolling, investigating crimes, and ensuring public safety.

Middle Managers

Employees who manage other managers or significant projects within an organization, serving as a link between top management and lower-level staff.

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Individuals occupying top positions in an organization, responsible for making major decisions.