You are considering two mutually exclusive projects with the following cash flows: Projected cash flows Probabilities Project A Project B Investment required 1.0 $150,000 $180,000 Annual cash flows and probabilities of occurrence for each of five years 0.3 $35,000 $45,000 0.5 $40,000 $55,000 0.2 $50,000 $67,000 (a) Compute the mean of NPW distribution for Project A using i=12%. Assume that project cash flows are mutually independent.

Problem 11.25 You are considering two mutually exclusive projects with the following cash flows: Projected cash flows Probabilities Project A Project B Investment required $150,000 $180,000 0.3 $35,000 $45,000 Annual cash flows and probabilities of occurrence for each of five years 0.5 $40,000 $55,000 $50,000 $67,000 (a) Compute the mean of NPW distribution for Project A using i=12%. Assume that project cash flows are mutually independent