Richardson Supplies Has Run a Simulation on a Large Project

question 49

Multiple Choice

Richardson Supplies has run a simulation on a large project to produce eco-friendly packaging for personal hygiene products.The mean NPV is an impressive $8 000,000, but there is a 16% probability of a negative NPV and a 5% probability of an NPV worse than $6 000,000.

• A)Cranston should reject the project.It is too risky.
• B)Cranston should accept the project.The odds are in their favor.
• C)Cranston should explore options to reduce the likelihood of very unfavorable outcomes.
• D)Cranston should change the probabilities used in the simulation to reduce the likelihood of a negative NPV.

---

Definitions:

Macronucleus

A large nucleus found, along with one or several micronuclei, in ciliates. The macronucleus regulates metabolism and growth. Compare with micronucleus.

Ciliates

A group of protozoans characterized by the presence of hair-like structures called cilia, used for movement and feeding.

Diplomonads

Small, mostly parasitic excavates with one or two nuclei, no functional mitochondria, and one to four flagella.

Excavates

Flagellated unicellular protists, many of which have a deep (excavated) oral groove; include diplomonds, parabasilids, and euglenoids.