Question
A risky $22,000 investment is expected to generate the following cash flows: Year 1 2 3 $ 18,375 $ 21,000 $ 24,500 The probability of
A risky $22,000 investment is expected to generate the following cash flows:
| Year | 1 | 2 | 3 | ||||||
| $ | 18,375 | $ | 21,000 | $ | 24,500 | ||||
The probability of receiving each cash inflow is 80, 70, and 60 percent, respectively. If the firms cost of capital is 10 percent, should the investment be made? Use Appendix D to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $
The investment -Select-shouldshould notItem 2 be made.
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Municipal Finances A Handbook For Local Governments
Authors: Catherine D. Farvacque-Vitkovic, Mihaly Kopanyi
1st Edition
082139830X, 978-0821398302
