Zeta Corporation Plans to Invest in a Project

question 4

Multiple Choice

Zeta Corporation plans to invest in a project.The initial investment is €200 million and the next year's cash flow will be €20 million.There will be a perpetual annual cash flow stream of either €15 million or €4 million will occur each year thereafter,depending on whether the economy is good or bad one year from now.Assuming that the risk-free interest rate is 5 per cent per year,and that €1.00 invested in the market portfolio today will be worth either €1.30 (if the economy does well) or €0.80 (if the economy does poorly) .Find the NPV of the project.

• A)€200 million
• B)€320 million
• C)€210 million
• D)€100 million

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Definitions:

Competitiveness

The desire to achieve superiority or an advantage over others, often through comparison or competition.

Aggressiveness

A tendency to be assertive, forceful, or potentially harmful in behavior or attitude.

Conflict Management Styles

The varied approaches and techniques used to address and resolve disagreements or disputes, ranging from avoidance to collaboration.

Prosocials

denotes individuals who have a tendency to behave in ways that benefit others, showing concern for the welfare and rights of others.