ABC is considering two mutually exclusive investment projects

which have a shelf life of two years. The cash flows of the two programs $($in thousands

euros$),$ as well as the corresponding probabilities of their realization are presented

in the tables below:

$7$:$43$

Done

Searc

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A$/.$ Consider, based on the criterion of Expected Net Present Value,

which of the two investments would you choose, given that its weighted average cost

capital in the case of Investment A is estimated at $10\%,$ Investment B at $8\%,$

while the risk$-$free interest rate is $3\%.$

B$/.$ Let's say at the end of the first year a prospective buyer comes along

and submits an offer to buy the investment you chose to

implement in query a$/.$ According to his offer, he intends to her

buy instead of the amount of $400,000$ euros. Considering his offer,

justify whether or not it is profitable to sell the investment

at the end of the first year.

so far the answers have been incomplete and wrong $.$

check the table and answer.