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A project has an initial investment of 150,000 and no residual value. The company has a cost of capital of 15% Cash flow Year 1
A project has an initial investment of 150,000 and no residual value.
The company has a cost of capital of 15%
| Cash flow Year 1 | Probability |
| 100,000 | 0.4 |
| 150,000 | 0.6 |
| Cash flow Year 2 | Probability |
| 50,000 | 0.3 |
| 100,000 | 0.7 |
Work out the possible outcomes, the probabilities of each outcome, the net present value of each outcome and the expected net present value:
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