Question: During the process of making a decision tree for a project, an analyst set up the payoff matrix below. The payoffs would occur three years

During the process of making a decision tree for a project, an analyst set up the payoff matrix below. The payoffs would occur three years from today. The project is expected to cost $1,700,000 today. If the discount rate is 11 percent, what is the projects NPV?

Outcome Probability Payoff

Success .35 $ 2,200,000

Failure .65 $ 0

a. -$930,000

b. -$1,136,983

c. $930,000

d. $770,000

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