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A company is considering a project involving the outlay of 200,000 which it estimates will generate cash flows over its 2 year life span at

A company is considering a project involving the outlay of 200,000 which it estimates will generate cash flows over its 2 year life span at the probabilities shown in the following tables:

Cash flow project Year 1

Cash Flow () Probability
200,000 0.6
300,000 0.4

Cash flow project Year 2

If the cash flow in Year 1 is: () There is a probability of: That the cash flow in Year 2 will be: ()
200,000 0.1 0
0.5 100,000
0.4 200,000
300,000 0.4 100,000
0.3 200,000
0.3 250,000

What is the probability that the total cashflow will be 400,000?

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