A risky $30,000 investment is expected to generate the following cash flows: The probability of receiving each

Question:

A risky $30,000 investment is expected to generate the following cash flows:

The probability of receiving each cash inflow is 90, 80, and 70 percent, respectively. If the firm€™s cost of capital is 12 percent, should the investment be made?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...