Question
A risky $34,000 investment is expected to generate the following cash flows: Year 1 2 3 $ 15,750 $ 18,000 $ 21,000 The probability of
A risky $34,000 investment is expected to generate the following cash flows:
| Year | 1 | 2 | 3 | ||||||
| $ | 15,750 | $ | 18,000 | $ | 21,000 | ||||
The probability of receiving each cash inflow is 80, 70, and 60 percent, respectively. If the firms cost of capital is 6 percent, should the investment be made? Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $
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The Economics Of Money Banking And Finance
Authors: Peter Howells, Keith Bain
2nd Edition
0273651080, 978-0273651086
