Project a Generates $5,000

question 32

Multiple Choice

Project A generates $5,000.00 in revenue two years from today and costs $4,000.00. Project B generates $4,000.00 (50% probability) or $6,000.00 (50% probability) one year from today and costs $4,500.00. Assuming a discount rate of 12% for both projects, which project does a risk averse manager prefer?

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

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Definitions:

Sanctions

Measures taken by a country or international body to enforce international law, often involving trade restrictions or economic measures.

Deviant

An individual whose actions, beliefs, or behavior diverge significantly from societal norms or expectations.

Constructionist Perspective

A sociological approach that emphasizes the role of social processes and interactions in the creation of social realities.

Constructionist Sociologists

Sociologists who subscribe to the theory that reality is socially constructed, emphasizing the ways in which social phenomena are created, institutionalized, and made into tradition by humans.