ASSIGNMENT THREE A. Explain the Net Present Value Method and give reasons why it is considered the best technique for evaluating investments 15 marks B. Dan Ltd. is a private company wholly owned by Danladi. The company's cost of capital is estimated as 14% per annum. A new project is just about to be launched and requires an immediate investment of GHQ 500,000. The finance manager has estimated net cash inflows and their respective probabilities over the life of the project which is 2 years as follows:- Year 1 Net Cash Inflows: State of Economy Probability Probability Cash Flow (GHC) Weak .2 200,000 Moderate .5 250,000 Good .3 400,000 Year 2 Net Inflows: State of Economy Probability Net Cash Flow (GHC) Moderate .7 300,000 Good .3 400,000 It is required that the economic conditions are independent. Required: Calculate the expected NPV of the project