1)- Given the following estimates of cash flows. determine the probability that the present worth will be positive, and hence it is desirable to take the project at an interest rate of 15% (i.e., should we accept it?). Determine the probability that the net present worth will be less that -$2000. End of year Mean cash flow Probability distribution 2) 1 -20000 Normal (Std. deviation=0) 2 8000 Normal (Std. deviation = 1500) 3 8000 Normal (std. deviation = 2000) 4 8000 uniform (between 6500 and 9500) 5 9000 Uniform (between 7000 and 11000) Problem #2 Given the cash flow for two projects in the following table, determine (based on Net Present worth) which project we should take. What is the probability that we will lose money (risk %) if we select Project #1 End of year Project Mean value of cash flow Prob. Distribution /Std. Deviation(2) 32000 $0 10000 Normal (Std. deviation $ 900) AWNP 9500 Normal ( * * a a "$1200) 8000 Normal ( * as a " "$1400) -36000 SO 15000 Uniform ($12000 - $18000) NNNN 12000 Uniform ($10000 -$14000) 9000 Normal (Std. deviation = $1200) (1): You may use the method explained in the textbook, other sources or the one I have explained in the tutorial which Is uploaded to the course site now [2): The probability distribution of the cha flows ae either Normal (Mean and Std. Deviation given) or Uniform with given Max and min. values. In the Risk analysis tutorial, it is shown that to generate random values from a Normal Probability distribution or uniform distribution, we use the excel functions NORMINV(rand/]. Mean, Std. Deviation)