Question: Your team is evaluating two mutually exclusive projects. The initial cost of each investment is $50,000. The probability of the cash flows is shown below.
- Your team is evaluating two mutually exclusive projects. The initial cost of each investment is $50,000. The probability of the cash flows is shown below. If the project will have a 5 year life and the appropriate cost of capital is 9% calculate the following:
| Probability | CF(A) | CF(B) |
| 10% | (34,000) | (13,500) |
| 25% | (8,500) | 2,125 |
| 30% | 17,000 | 19,000 |
| 25% | 42,500 | 31,875 |
| 10% | 68,000 | 46,750 |
- Expected value
- NPV
- Standard deviation
- IRR
- MIRR
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