Use the Following Information to Answer the Question(s)below

question 107

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that you have received two job offers.Rearden Metal offers you a contract for $75,000 per year for the next two years while Wyatt Oil offers you a contract for $90,000 per year for the next two years.Both jobs are equivalent.Suppose that Rearden Metal's contract is certain,but Wyatt Oil has a 60% chance of going bankrupt at the end of the year.In the event that Wyatt Oil files for bankruptcy,it will cancel your contract and pay you the lowest amount possible for you to not quit.If you do quit,you expect you could find a new job paying $75,000 per year,but you would be unemployed for four months while searching for this new job.
-If you take the job with Wyatt Oil,then,in the event of bankruptcy,the least amount that Wyatt Oil would pay you next year is closest to:

• A)$45,000.
• B)$50,000.
• C)$54,000.
• D)$75,000.

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Definitions:

Summarized Financial

Financial statements that present a concise overview of a company's financial position and performance, without detailed disclosures.

Financial Statements

Comprehensive reports that communicate an entity's financial performance and position within a specific period, including the balance sheet, income statement, and cash flow statement.

Internal Use

Information or documentation not intended for public release, designed solely for use within an organization or company.

External Use

refers to information or reports prepared specifically for parties outside the organization, such as investors or regulators.