Table 12.3 Tangshan Mining Company Is Considering Investment in One of Two

question 4

Multiple Choice

Table 12.3
Tangshan Mining Company is considering investment in one of two mutually exclusive projects M and N which are described below. Tangshan Mining's overall cost of capital is 15 percent, the market return is 15 percent and the risk-free rate is 5 percent. Tangshan estimates that the beta for project M is 1.20 and the beta for project N is 1.40.
-Using the risk-adjusted discount rate method of project evaluation, the NPV for project M is ________. (See Table 12.3)

• A) $156,494.
• B) $122,970.
• C) $85,732.
• D) none of the above.

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Definitions:

Mechanical Energy

The sum of potential energy and kinetic energy present in the components of a mechanical system.

Hippocampus

A region of the brain associated with memory formation, organization, and retrieval.

Retina

Light-sensitive surface at the back of the eye, consisting of neurons and photoreceptor cells.

Hyperopia

A common vision condition, also known as farsightedness, where distant objects can be seen clearly, but close ones do not come into proper focus.