A company wishes to borrow 6.4 million to invest in a project. There is a 55%...

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A company wishes to borrow £6.4 million to invest in a project. There is a 55% probability that the project will result in a net cash inflow of £8 million and a 45% probability that the project will result in a net cash inflow of £2.4 million. The company's only activity is the project. Assuming a 7% discount rate, how much will the company have to repay in the favourable state for a bank to be willing to make the loan? A company wishes to borrow £6.4 million to invest in a project. There is a 55% probability that the project will result in a net cash inflow of £8 million and a 45% probability that the project will result in a net cash inflow of £2.4 million. The company's only activity is the project. Assuming a 7% discount rate, how much will the company have to repay in the favourable state for a bank to be willing to make the loan?

Answer rating: 100% (QA)

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