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A risky $500,000 investment is expected to generate the following cash flows: Year 1 2 3 $250,000 $266,667 $285,715. The probability of receiving each cash
A risky $500,000 investment is expected to generate the following cash flows: Year 1 2 3 $250,000 $266,667 $285,715. The probability of receiving each cash inflow is 80, 75, and 70 percent, respectively. If the firm's cost of capital is 10 percent, and the risk free rate is 6 percent should the investment be made?
-2,629.60
162,320.68
34,602.39
100,000.00
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