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:

Training

The process of enhancing the skills, knowledge, and competencies of employees through educational activities.

Productivity

The measure of efficiency in converting inputs into useful outputs, often analyzed to improve performance in business or personal tasks.

Task Analysis

The process of breaking down a task into its components to study the task’s requirements and the skills needed to perform it.

Management Object

An element or goal that management aims to achieve through planning, organizing, leading, and controlling organizational resources.