Use the Information for the Question(s)below

question 43

Multiple Choice

Use the information for the question(s) below.
Larry the Cucumber has been offered $14 million to star in the lead role of the next three Larry Boy adventure movies.If Larry takes this offer,he will have to forgo acting in other Veggie movies that would pay him $5 million at the end of each of the next three years.Assume Larry's personal cost of capital is 10% per year.
-The NPV of Larry's three-movie Larry Boy offer is closest to:

• A)3.5 million.
• B)-1.6 million.
• C)1.6 million.
• D)-1.0 million.

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Definitions:

True Score

In psychological testing and measurement, the actual or real score that perfectly reflects the characteristic or ability being measured, without measurement error.

Observed Score

The actual score or measurement recorded during data collection.

Critical Score

The value that a test statistic must exceed in order for a hypothesis to be rejected at a specified significance level.

Reliability Coefficient

A measure indicating the consistency of a set of scores obtained from repeated measurements of the same phenomenon.