Question: FitcomCorp. is considering a three-year project that will require an initial investment of $40,000. If market demand is strong, FitcomCorp. thinks that the project will

FitcomCorp. is considering a three-year project that will require an initial investment of $40,000. If market demand is strong, FitcomCorp. thinks that the project will generate cash flows of $29,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $2,000 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak. If the company uses a project cost of capital of 10%, what will be the expected net present value (NPV) of this project?

-$832

-$790

-$998

-$666

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