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A nroiect has an initial cost of $2,800 and the Wellsley Corporation's cost of capital is 10 percent. The project has the following probability distribution
A nroiect has an initial cost of $2,800 and the Wellsley Corporation's cost of capital is 10 percent. The project has the following probability distribution of expected net cash flows in each of the next three years: Possible Market Reaction Probability Net Cash Flow Low response 0.20 $1,000 Moderate response 0.10 2,000 High response 0.30 3,000 Very high response 0.40 4,000 (a) Determine the project's expected value of net cash flows in each of the next three years. (b) Determine the net present value of the project. (C) Determine the standard deviation of net cash flows in each of the next three years
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