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An investment project requires the investment costs of $150,000 at the present time and $100,000 at year 1. There are three possible outcomes for this

An investment project requires the investment costs of $150,000 at the present time and $100,000 at year 1. There are three possible outcomes for this project:

1. 25% probability of success, which yields: annual income of $100,000 from year 2 to year 10 with a salvage value of $50,000 and environmental remediation cost of $60,000 at the end of year 10.

2. 45% probability of success, which yields: annual income of $80,000 from year 2 to year 7, an annual environmental remediation cost of $10,000 from year 2 to year 7, and a salvage value of $50,000 at the end of year 7.

3. 30% probability of failure: zero income for all the years and salvage value of $250,000 at the end of year 2 with no environmental remediation costs.

Calculate the ENPV and conclude if this is a good investment, considering the minimum rate of return (discount rate) of 15%.

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