Question: Galbraith Co. is considering a four-year project that will require an initial investment of $15,000, The base-case cash fows for this project are projected to
Galbraith Co. is considering a four-year project that will require an initial investment of $15,000, The base-case cash fows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $26,000 per year, and the worst-case cash flows are projected to be $4,500 per year. The company's analysts have estimated that there is a S0\% probability that the project will generate the base-case cash flows. The analysts aiso think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash fows. What would be the expected net present value (NPV) of this project if the project's cost of capital is 10% ? $24,227$2.6,650$25,438$23,016
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