Johnson Ltd. determined that the net present value of an investment in technological improvements at its
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Question:
Johnson Ltd. determined that the net present value of an investment in technological
improvements at its plant in France would be €12,000,000 if pending litigation was resolved in
the company's favor and would be €3,000,000 if the courts ruled against the company. Johnson's
attorneys in France assessed the probability of a favorable ruling at 85%.
Required: What is the expected net present value of the project? Show your work
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ISBN: 9781292409863
13th Global Edition
Authors: Lee Krajewski, Naresh Malhotra, Larry Ritzman
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