Use the Information for the Question(s)below

question 9

Multiple Choice

Use the information for the question(s) below.
Your firm faces an 8% chance of a potential loss of $50 million next year.If your firm implements new safety policies,it can reduce the chance of this loss to 3%,but the new safety policies have an upfront cost of $250,000.Suppose that the beta of the loss is 0 and the risk-free rate of interest is 5%.
-If your firm is uninsured,the NPV of implementing the new safety policies is closest to:

• A)$2.25 million.
• B)-$.25 million.
• C)$2.5 million.
• D)$2.15 million.

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Definitions:

Computers

Electronic devices designed to store, process, and retrieve data, capable of executing a set of instructions to perform a wide range of tasks.

Electronic Communication

The transmission of information using electronic means such as email, social media, or instant messaging.

"You" Attitude

A communication approach that focuses on the receiver, making messages more personal by speaking directly to the reader or listener.

Oral Communication

The exchange of information or ideas using spoken words, as opposed to written or nonverbal communication.