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

question 11

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metal is evaluating a project that requires an investment of $150 million today and provides a single cash flow of $180 million for sure one year from now.Rearden decides to use 100% debt financing for this investment.The risk-free rate is 5% and Rearden's corporate tax rate is 40%.Assume that the investment is fully depreciated at the end of the year.
-The NPV of this project using the APV method is closest to:

• A)$10 million
• B)$13 million
• C)$42 million
• D)$71 million

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Definitions:

Golden Rule

A moral principle which suggests treating others as one would wish to be treated oneself.

Ethical Decision-Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Stare Decisis

A legal principle that dictates that courts should follow the precedents set by previous decisions in similar cases to ensure consistency and predictability in the law.

Standing By

The act of remaining ready or available to act or offer help while waiting for further instruction or developments.