Question: Sunny Co. is considering a three-year project that will require an initial investment of $55,000. It has estimated that the annual cash flows for the

Sunny Co. is considering a three-year project that will require an initial investment of $55,000. It has estimated that the annual cash flows for the project under good conditions will be $80,000 and $9,000 under bad conditions. The firm believes that there is a 60% chance of good conditions and a 40% chance of bad conditions.

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