3. The Power Nepal, a producer of printed T-shirts wants to decide regarding opening a factory. However, it believes that after two years a large number of foreign firms will enter the market and The Power Nepal will run out of business. Therefore there will be cash inflow only for two years and decision has to be made on that basis. The plant requires Rs.1,05,000 initial investment and has 2 years life. It requires 10 percent return. The initial and conditional probabilities and estimated cash flows are given below: Year 1 Year 2 OCF (Rs.) Probability OCF (Rs.) Probability 0.25 50,000 0.35 60,000 0.50 60,000 0.25 75,000 0.30 85,000 0.65 90,000 0.40 95,000 0.30 105,000 Show the cash flows along with initial, conditional and joint probability in pictorial form i.e. probability tree. (10) Should the plant be established? Explain what other factors should be considered in order to establish a plant. a. b