If MacCaugh's Pilot Project Is Successful,it Will Be Able to Build

question 52

Multiple Choice

If MacCaugh's pilot project is successful,it will be able to build a plant with an NPV of $2 million in 1 year's time.Otherwise the pilot investment will be valueless.If the discount rate is 20% and the chances of success are 50%,how much can MacCaugh afford to spend on the pilot project?

• A) $1 million.
• B) $2 million.
• C) $1.667 million.
• D) $833,333.

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Definitions:

Nasopharynx

The nasopharynx is the upper part of the pharynx, connecting the nasal cavity above to the mouth and larynx below.

Simple Squamous Epithelium

A single layer of flat cells lining surfaces involved in passive diffusion, such as the lining of blood vessels and air sacs of the lungs.

Alveoli

Tiny air sacs in the lungs where the exchange of oxygen and carbon dioxide takes place.

Alveolar Ducts

Tiny ducts in the lungs that connect the bronchioles and alveolar sacs, facilitating gas exchange.