Question
Consider a risky investment that depends on the weather. The investment is for one year, initial investment paid today and then a net cash inflow
Consider a risky investment that depends on the weather. The investment is for one year, initial investment paid today and then a net cash inflow is realized in one year. Initial Investment $50 Discount Rate 10% Weather Net Cash Flow Year 1 Probability Good 100 Bad -10 0.65 0.35 What is the NPV of the investment in the weather is Good?
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