If the Discount Rate Is 15%,then Which Alternative Should the Owner

question 25

Multiple Choice

If the discount rate is 15%,then which alternative should the owner choose:

• A)#1
• B)#2
• C)#3
• D)either #1 or #2
• E)either #1 or #3

---

Definitions:

Net Earnings

The profit (or loss) of a business after all expenses have been deducted from revenues.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Net Earnings Per Share

A financial ratio calculated by dividing the net income of a company by the average number of its outstanding shares, indicating the company's profitability per share.

Stock Price

The cost of purchasing a single share of a company's stock, reflecting the value investors place on the company.