Question: A project has three possible outcomes. The NPV and probabilities for each outcome are shown below: CASE: NPV: Probability BAD -$4,000 0.40 AVERAGE $500 0.40

A project has three possible outcomes. The NPV and probabilities for each outcome are shown below:

CASE:

NPV:

Probability

BAD

-$4,000

0.40

AVERAGE

$500

0.40

GREAT

$10,000

0.20

What is the expected NPV for this project if our assumptions are correct?

$2,100

$3,450

$1,050

$2,450

$600

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

A project has three possible outcomes. The NPV and probabilities for each outcome are shown below: CASE: NPV: Probability BAD -$4,000 0.20 AVERAGE $500 0.50 GREAT $10,000 0.30 What is the expected...

Q:

A project has three possible outcomes. The NPV and probabilities for each outcome are shown below: CASE: NPV: Probability BAD -$4,000 0.20 AVERAGE $500 0.50 GREAT $10,000 0.30 What is the expected...

Q:

question 11 and 5 Non 4. A project with uncertain outcomes is being assessed. Three possible outcomes have been identified and probabilities have been assigned to these as shown below. Outcome NPV (...

Q:

question 3 and 4 pls Corporate Finance Concepts 1. You are provided with this information about two mutually exclusive investments: Investment Project X Project Y Initial cost of equipment 50,000...

Q:

pls answer all 11 questions Corporate Finance Concepts 1. You are provided with this information about two mutually exclusive investments: Investment Project X Project Y Initial cost of equipment...

Q:

kindly provide me it's detailed solution with in 20 mins Q. 3 Suppose that we are considering the investment project which requires an initial investment outflow of $345. Given a resulting cash flows...

Q:

Dear 891 tutor, please help me how to get the result of every question. Page 1 of 7 FINC 5001 Capital Markets and Corporate Finance Practice Final Exam Suggested time: 150 minutes Page 2 of 7...

Q:

1 2.3 Definition of a Discrete Probability Function Definition: Let S be a discrete sample space from some experiment. A function P, defined on all events in S, is said to be a probability function...

Q:

Algorithms in Artificial Intelligence (or, the old name: Introduction to Algorithmic Decision Making) Part 1 Based on slides by David Sarne and Lirong Xia Course Tentative Schedule Introduction...

Q:

Project Risk Project Risk Project risk is the average risk for the firm. The higher the perceived risk, the more investors will demand as a rate of return (cost of financing). Since the firm is the...

Q:

A company must include a summary of its accounting policies in the notes to its financial statements. The Coca-Cola Company includes this summary as the first of its notes to the consolidated...

Q:

Can equity share with differential voting rights be issued? If yes, state the conditions under which such shares may be issued.

Q:

a company with 1 , 0 0 0 , 0 0 0 outstanding shares declares a dividend of 2 per share. at the same time, it announces a stock repurchase of 1 0 0 , 0 0 0 shares at 2 5 per share. how would this...

Q:

P-1) (100 Pts.) A chemical manufacturing company (CMC) has a contract for the procurement of the neccssaly chemicals from four suppliers. The chemicals purchased from Supplier A are priced at $20...

Q:

What is occurring in this case and identify the parties affected by events reported in the case.

Q:

What are the key HR considerations for operating in such an industry?

Q:

Begin by a specific definition of the fast-food industry in a geography of your choice.Explain the rationale of your choice.