Use the Following Information to Answer the Question(s)below

question 94

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a debt-equity ratio of 1.8,an equity beta of 1.6,and a debt beta of 0.20.It is currently evaluating the following projects,none of which would change Nielson's volatility. (All amounts are in $millions. )
-Which of the following projects should Nielson Motors accept?

• A)1 only
• B)1,2,and 3 only
• C)1 and 4 only
• D)2,3,and 5 only

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Definitions:

Net Income

The final amount a company keeps as profit after deducting all costs and taxes from its gross revenue.

Marginal Tax Rate

The rate of tax imposed on your income, corresponding to each applicable tax bracket.

Average Tax Rate

Total taxes paid divided by total taxable income.

Net Working Capital

The difference between a company’s current assets and current liabilities, indicating the liquidity of the business.