Use the Information for the Question(s)below

question 31

Multiple Choice

Use the information for the question(s) below.
Iota Industries is an all-equity firm with 50 million shares outstanding.Iota has $200 million in cash and expects future free cash flows of $75 million per year.Management plans to use the cash to expand the firm's operations,which in turn will increase future free cash flows by 12%.Iota's cost of capital is 10% and assume that capital markets are perfect.
-The NPV of Iota's expansion project is closest to:

• A)-$110 million.
• B)-$137.5 million.
• C)$0.
• D)$75 million.

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Definitions:

Empower

To give someone the authority or power to do something or to make someone stronger and more confident, especially in controlling their life and claiming their rights.

Theory X

A theory of management that assumes employees are inherently lazy and require strict supervision and control to be productive.

Role Ambiguity

Uncertainty about one's responsibilities, duties, or expectations in a job or position.

Sociopolitical Support

Assistance or backing in the context of social and political arenas.