Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that the ner present worth of a project was computed for 3 different scenarios, setting the relevant input variables to values that would occur

image text in transcribed

Assume that the ner present worth of a project was computed for 3 different scenarios, setting the relevant input variables to values that would occur under the expected, optimistic, and pessimistic scenarios. The net present worth was computed to equal $20,000 under the expected scenario, $50,000 under the optimistic scenario, and -$70,000 under the pessimistic scenario. The probability of the expected scenario turning out to be accurate is 50%, the probability of the optimistic scenario being accurate is 30%, and the probability of the pessimistic scenario being accurate is 20%. What is the expected net present worth of the project? Select one: a. $47,000 b. $21,000 C. 50 d. $11,000 e. $140,000 f. $39,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Issues In Finance

Authors: Simon Grima, Frank Bezzina, Inna Romanova

1st Edition

1786359073, 978-1786359070

More Books

Students also viewed these Finance questions

Question

Understand the different approaches to job design. page 167

Answered: 1 week ago