A Firm Has Three Different Investment Options

question 68

Multiple Choice

A firm has three different investment options.Option A will give the firm $10 million at the end of one year,$10 million at the end of two years,and $10 million at the end of three years.Option B will give the firm $15 million at the end of one year,$10 million at the end of two years,and $5 million at the end of three years.Option C will give the firm $30 million at the end of one year,and nothing thereafter.Which of these options has the highest present value?

• A)Option A
• B)Option B
• C)Option C
• D)The answer depends on the rate of interest.

Recognize the significance of leader-member exchange (LMX) in shaping leader-subordinate relationships.

Understand the impact of societal cultural values and practices on organizational culture and practices as identified by the GLOBE model.

Assess the role of culture in leadership within a specific country context (e.g., Mexico).

Grasp the concept of leading in crises and the stability of institutions as discussed by Bill George.

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Definitions:

Unamortized Patent

The portion of a patent's purchase cost that has not yet been expensed through amortization in the income statement.

Consolidation

The process of combining financial statements of separate subsidiaries, divisions or entities within an organization into a single, comprehensive financial statement.

Buildings Account

An account in the financial statements that represents the value of a company's buildings as assets.

Unamortized Patent

The cost of a patent that has not yet been gradually written off as an expense over its useful life.