A Decision Tree Shows a 30% Probability of $2 Million

question 23

Multiple Choice

A decision tree shows a 30% probability of $2 million in returns and a 70% chance of $1 million in returns.What is the maximum you would invest today in this project if the cash inflow occurs one year in the future and the discount rate is 10%?

• A) $818,182
• B) $1,181,818
• C) $1,300,000
• D) $1,363,636

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Definitions:

Market Supply Curve

A graphical representation showing the quantity of a good that producers are willing to sell at different prices, assuming all other factors remain constant.

Diversity Leadership

The practice of leading with attention to diversity, recognizing and valuing differences among team members' backgrounds, perspectives, and skills to enhance creativity and innovation.

Leadership Approach

A systematic way that an individual takes to guide, direct, and influence the work of others within an organization, often categorized into styles such as autocratic, democratic, or laissez-faire.

Valuing Differences

Recognizing and appreciating the diverse backgrounds, skills, and perspectives individuals bring to a group or organization.