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Corporate Finance · Quiz 2 · 1 Dec 2024 · September 2024 term

Question 12: A garment outlet can be worth 60 thousand in two years w…

Question 12

+1 markOne correct option

A garment outlet can be worth 60 thousand in two years with a 25% probability or 150 thousand in two years with a 75% probability, depending on product demand. The appropriate cost of capital is 10% per year. What is the present value of the outlet? (up to two decimal points)

  1. A

    100.00 thousand

  2. B

    105.37 thousand

  3. C

    115.91 thousand

  4. D

    127.50 thousand

Show answer

Correct answer

  • B

    105.37 thousand

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Question 12 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 2 paper sat on 1 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB2 01 Dec 2024). It carries 1 mark.

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