Use the Information for the Question(s)below

question 89

Multiple Choice

Use the information for the question(s) below.
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy,with each outcome being equally likely.The initial investment required for the project is $80,000,and the project's cost of capital is 15%.The risk-free interest rate is 5%.
-The NPV for this project is closest to:

• A)$6250.
• B)$14,100.
• C)$10,000.
• D)$18,600.

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Definitions:

Job

A paid position of regular employment or a specific task done as part of the routine of one's occupation.

Critical Ratio

is a metric used in project management and operations to assess the urgency of tasks by comparing the time remaining to the total remaining work.

Dispatching Rules

Guidelines or strategies used in production and operations management to prioritize and allocate tasks or jobs to available resources or machines.

Flow Time

The total time a product takes to go through a production process, from start to finish, including both processing and waiting times.