Hex wood Diagnostic Enterprises is evaluating a project with the following net cash flows and probabilities:

The Year 5 values include salvage value. Hey wood's corporate cost of capital is 10 percent.

Assume that Heywood's managers judge the project to have higher-than-average risk. Furthermore, the company's policy is to adjust the corporate cost of capital up or down by 3 percentage points to account for differential risk. Is the project financiallyattractive?

Year Prob 0.2 Prob 0.6 Prob 0.2 S(100,000) S(100,000) S(100,000) $20,000 $20,000 $20,000 $20,000 S20,000 S30,000 $30,000 S30,000 $30,000 S40,000 S40,000 $40,000 S40,000 S40,000 $50,000