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.

---

Definitions:

White Terrorism

Acts of terrorism committed by individuals or groups that believe in white supremacy or prioritize white interests over those of other racial or ethnic groups.

Emmett Till

A 14-year-old African American boy whose brutal murder in Mississippi in 1955 became a catalyst for the Civil Rights Movement.

Desegregated Schools

Educational institutions that have been integrated, allowing students of all races to attend the same schools.

Montgomery Bus Boycott

A social protest campaign against racial segregation on the public transit system in Montgomery, Alabama, that began in 1955.