Mitata Co. is considering a three-year project that will require an initial investment of $55,000. It has
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Mitata Co. is considering a three-year project that will require an initial investment of $55,000. It has estimated that the annual cash flows for the project under good conditions will be $40,000 and $9,000 under bad conditions. The firm believes that there is a 60% chance of good conditions and a 40% chance of bad conditions.
If the firm is using a weighted average cost of capital of 13%, calculate the expected net present value (NPV) of the project.
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
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