Question
A project has three possible outcomes. The NPV and probabilities for each outcome are shown below: CASE: NPV: Probability BAD -$4,000 0.40 AVERAGE $500 0.40
A project has three possible outcomes. The NPV and probabilities for each outcome are shown below:
| CASE: | NPV: | Probability |
| BAD | -$4,000 | 0.40 |
| AVERAGE | $500 | 0.40 |
| GREAT | $10,000 | 0.20 |
What is the expected NPV for this project if our assumptions are correct?
|
| $2,100 |
|
| $3,450 |
|
| $1,050 |
|
| $2,450 |
|
| $600 |
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Corporate Finance For Dummies
Authors: Michael Taillard
2nd Edition
1119850312, 978-1119850311
