Use the Information for the Question(s)below

question 9

Multiple Choice

Use the information for the question(s) below.
Your firm faces an 8% chance of a potential loss of $50 million next year.If your firm implements new safety policies,it can reduce the chance of this loss to 3%,but the new safety policies have an upfront cost of $250,000.Suppose that the beta of the loss is 0 and the risk-free rate of interest is 5%.
-If your firm is uninsured,the NPV of implementing the new safety policies is closest to:

• A)$2.25 million.
• B)-$.25 million.
• C)$2.5 million.
• D)$2.15 million.

---

Definitions:

Steering Column

The shaft that connects a vehicle's steering wheel to the steering system, allowing the driver to guide the direction of the vehicle.

Control Module

A control module is an electronic component responsible for managing the operations of a particular system within a vehicle, such as the engine or transmission.

Night Visioning

The ability to see in low-light conditions, achieved through technology that amplifies light or uses thermal imaging.

Bendix XVision

Bendix XVision is a proprietary technology developed by Bendix that enhances vehicle safety through advanced vision systems, likely focusing on improving driver visibility and detection capabilities.