Question
1. Mr. Thompson is considering investing in two period projects with the following probabilities and cash flows: Probability Cash Flow Period 1 .25 1000 .50
1.Mr. Thompson is considering investing in two period projects with the following probabilities and cash flows:
Probability Cash Flow
Period 1 .25 1000
.50 1200
.25 1400
Period 2 .30 600
.50 1000
.20 1400
The discount rate is 7%, and the initial investment is $2,000. How much is the expected NPV of this project? Should Mr. Thompson invest or not? Briefly explain your reasoning.
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Crashed How A Decade Of Financial Crises Changed The World
Authors: Adam Tooze
1st Edition
0143110357, 9780143110354
