Question: Q3) Example: a project whose initial cost =$75 million, Cost of Capital =10%, risk-free rate = 6%, cash flows occur for 3 years. The probability

Q3) Example: a project whose initial cost =$75 million, Cost of Capital =10%, risk-free rate = 6\%, cash flows occur for 3 years. The probability distribution of its cash flows for each year is as follows: (3 marks) a) What is the E(NPV) if the project is implemented now? (I marks) b) What is the E(NPV) if the firm waited for one year? (2 marks)

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