A company is considering an investment project with an expected life of 3 years. It requires an initial investment of $35,000. The company estimates the following data in each of the next 3 years;

After-Tax Cash Inflows ($)	Probability
-5,000	0.2
10,000	0.3
30,000	0.3
50,000	0.2

Required

Assuming a risk adjusted required rate of return (after taxes) of 20% is appropriate for the investment projects of this level of risk, compute the risk-adjusted NPV.

Answer rating: 100% (QA)

To calculate the riskadjusted NPV youll need to consider the expected cash inflows and their proba... View the full answer