Economists at Rudy Investments Estimate a 20% Probability of a Recession

question 71

Multiple Choice

Economists at Rudy Investments estimate a 20% probability of a recession next year, a 50% probability of an average economy, and a 30% probability of a rapid expansion.If there is a recession, the NPV of project O will be $20 million; if the economy is average, it will be $45 million and in case of a rapid expansion, it will be $75 million.What is the expected NPV of the project?

• A)$57.5 million
• B)$49 million
• C)$46.67 million
• D)$45 million

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Definitions:

Job Autonomy

The degree of freedom and independence a person has in their job, including the ability to make decisions and control their work processes.

Flex Time

A flexible work schedule that allows employees to alter work day start and finish times.

Professional Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged and intense stress in the workplace, characterized by feelings of overwhelm, detachment, and reduced performance.

Hidden Agenda

A covert intention or plan not openly acknowledged by an individual or group.