Use the Information for the Question(s)below

question 45

Multiple Choice

Use the information for the question(s) below.
JR Industries has a $20 million loan due at the end of the year and under its current business strategy its assets will have a market value of only $15 million when the loan comes due.JR is considering a new much riskier business strategy.While this new riskier strategy can be implemented using JR's existing assets without any additional investment,the new strategy has only a 40% probability of succeeding.If the new strategy is a success,the market value of JR's assets will be $30 million,but if the strategy fails the assets will be worth only $5 million.
-What is the overall expected payoff under JR's new riskier business strategy?

• A)$4 million
• B)$11 million
• C)$20 million
• D)$15 million

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Definitions:

Mature Zygospore

A thick-walled resting spore produced by the union of two similar fungal cells, serving as a form of resistance and survival in harsh conditions.

Young Zygospore

An early developmental stage of a zygospore, which is a thick-walled spore produced by the fusion of two similar gametes in fungi.

Haploid

Refers to cells that contain one complete set of chromosomes, typical of gametes in sexually reproducing organisms.

Mycorrhizae

A symbiotic association between a fungus and the roots of a vascular host plant, beneficially affecting nutrient uptake and resistance to pathogens.