Use This Information to Answer Questions 13-15

question 17

Multiple Choice

Use this information to answer questions 13-15.
Big Can, Inc., a U.S. firm, manufactures and sells aluminum cans worldwide. Because of a rising price of aluminum in the U.S., the company is considering to build a new plant in Europe. The plant will cost €20 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the European government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.2

-Refer to Table 9.2.Based on the net present value,

• A) the project can be accepted because the net present value is positive.
• B) the project should be rejected because the net present value is negative.
• C) the project can be accepted because the net present value is negative.
• D) the project should be rejected because the net present value is positive.

Examine the various systematic mistakes commonly made in personal and economic decisions.

Understand the role and impact of inertia in personal financial decisions.

Explore the implications of fairness and self-interest in economic transactions.

Evaluate the importance of self-confidence and its effects on decision making.

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Definitions:

Intergroup Differences

Variations in behavior, attitude, or other characteristics between different groups of people, often analyzed in social psychology.

Social Categorisation

The process of classifying people into groups based on shared characteristics, a fundamental operation in social cognition that affects perceptions and interactions.

Social Mobility Belief System

The set of beliefs regarding the fluidity and fairness of the social structure that allows individuals to move within different socio-economic levels.

Social Boundaries

The invisible lines that define the limits of acceptable behavior and participation within a society or group.