Problem $13-16($Algo$)$ Expected value with net present

value LO$13-1]$

Debby's Dance Studios is considering the purchase of new sound

equipment that will enhance the popularity of its aerobics dancing. The

equipment will cost $$33,600.$ Debby is not sure how many members the

new equipment will attract, but she estimates that her increased annual

cash flows for each of the next five years will have the following

probability distribution. Debby's cost of capital is $11$ percent. Use

Appendix D for an approximate answer but calculate your final answers

using the formula and financial calculator methods.

a$.$ What is the expected value of the cash flow? The value you compute

will apply to each of the five years.

Expected cash flow

b$.$ What is the expected net present value?

Note: Negative amount should be indicated by a minus sign. Do

not round intermediate calculations and round your answer to $2$

decimal places.

Net present value