Use the Information for the Question(s)below

question 31

Multiple Choice

Use the information for the question(s) below.
You own a small manufacturing plant that currently generates revenues of $2 million per year.Next year,based upon a decision on a long-term government contract,your revenues will either increase by 20% or decrease by 25%,with equal probability,and stay at that level as long as you operate the plant.Other costs run $1.6 million per year.You can sell the plant at any time to a large conglomerate for $5 million and your cost of capital is 10%.
-Given the embedded option to sell the plant,the value of your plant will be closest to:

• A)$5.0 million.
• B)$4.0 million.
• C)$6.5 million.
• D)$8.0 million.

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Definitions:

Rogers' Client-Centered

A therapeutic approach developed by Carl Rogers emphasizing the therapist's empathy and the client's intrinsic worth, facilitating personal growth and self-acceptance.

Wolpe's Exposure Therapy

A behavioral therapy technique developed by Joseph Wolpe that involves exposing the patient to anxiety-producing stimuli to reduce their sensitivity.

Aversive Conditioning

A behavioral modification strategy that applies aversive stimuli to prevent undesired behaviors.

Compulsive Gambler

An individual who has an uncontrollable urge to gamble despite harmful negative consequences or a desire to stop.