Buchanon Industries is evaluating a proposal to install solar panels on the roof of its factory near Huntsville. The panels will cost $540 thousand per set. Depending on the price of electricity and the efficiency of the panels, the project will increase net operating cash flows by either $86 thousand per year or $170 thousand per year with a 67% likelihood that the lesser outcome will occur. The useful life of the panels is 6 years. If early results indicate savings of $170 thousand per year, 3 additional sets of panels will be installed next year at the same cost and with the same projected increase in net operating cash flows. What is the expected NPV of the project (in $ thousands, rounded to one decimal place, e.g., 12.3) including the option to expand, given a discount rate of 12%?

Please solve based on the following information:

Incorrect The answer is 68.01%