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Assume a project only lasts one year, and has an initial cost of $100,000. Assuming the cost of capital is 5% and the probabilities and
Assume a project only lasts one year, and has an initial cost of $100,000. Assuming the cost of capital is 5% and the probabilities and corresponding cash flows in year 1 as listed in the table below, what is the probability that the project will result in a net present worth greater than zero? Year 1 Cash Flow CF Probability Year 1 0.15 0.10 0.20 0.12 0.05 0.14 0.08 0.16 $200,000 $150,000 $120,000 $108,000 $102,000 $95,000 $50,000 -$20,000 Select one: O a. 84%
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