NET firm is trying to decide between five mutually exclusive one-year projects.

	Return	Probability of return occurring
Project 1	16	1.0
Project 2	20	1.0
Project 3	-16	0.25
	36	0.50
	48	0.25
Project 4	-8	0.25
	16	0.50
	24	0.25
Project 5	-40	0.10
	0	0.60
	100	0.30

Please work out the likely outcome for each project and discuss whether you can make informed decision according to this.

Answer rating: 100% (QA)

To determine the likely outcome for each project we need to calculate the expected value of each pro... View the full answer