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A company is considering a project with an initial outflow of $7,000 and an expected life of 3 years. The cash flows are shown below
A company is considering a project with an initial outflow of $7,000 and an expected life of 3 years. The cash flows are shown below along with the probability distribution for the cash flows.
Probability Cash Flow
.5 $6,200
.1 7,000
.4 8,100
What is the project's expected annual cash flow?
$6,890 | ||
$7,090 | ||
$7,010 | ||
$6,740 | ||
$8,050 |
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