A Project Requires an Initial Investment of $1,000,000

question 37

Multiple Choice

A project requires an initial investment of $1,000,000. In one year, there is a 40% chance of a $950,000 return; a 50% chance of a $1,200,000 return; and a 10% chance of a $2,000,000 return. What is the project's expected return one year from now?

• A)12.8%
• B)15.5%
• C)18.0%
• D)38.3%

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Definitions:

High Metabolism

A condition where the body burns calories at a faster rate than average, often resulting in difficulty gaining weight.

Satiety

The feeling of fullness or satisfaction that signals the end of a meal and inhibits eating until the next meal.

Hunger Pangs

Physical sensations of discomfort or pain in the stomach area indicating the need or desire to eat.

Digestive Tract

The series of hollow organs joined in a long, twisting tube from the mouth to the anus, where digestion of food occurs.