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:

Anaerobic Respiration

A form of respiration that occurs in the absence of oxygen, producing energy and by-products like lactic acid or ethanol.

Prokaryotes

Unicellular organisms that lack a distinct nucleus and other membrane-bound organelles, including bacteria and archaea.

Electron Transport Chain

A series of complexes that transfer electrons from electron donors to electron acceptors via redox reactions, coupled with the transfer of protons (H+ ions) across a membrane.

NADH

Nicotinamide adenine dinucleotide (NADH) is a coenzyme found in all living cells, involved in redox reactions, carrying electrons from one reaction to another.