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.

---

Definitions:

Hereditary Material

Genetic material, such as DNA or RNA, that is passed from parents to offspring and determines inherited characteristics.

Sexual Selection

Refers to the process of choosing mates based on certain traits, which can influence an individual's ability to reproduce within a population.

Homoplasic Structures

Features in different species that appear similar not due to common ancestry but convergent evolution or evolutionary reversals.

Homologous

Refers to structures or genes that are similar between different organisms due to shared ancestry.