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Consider the following probability distribution of returns estimated for a proposed project that involves a new MRI machine: State of the Probability of Rate

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Consider the following probability distribution of returns estimated for a proposed project that involves a new MRI machine: State of the Probability of Rate of Return Economy Occurrence Very poor 0.15 -20.0% Poor 0.25 0.0 Average 0.15 15.0 Good 0.25 25.0 Very good 0.20 30.0 What is the expected rate of return on the project? 8.5% 10.5% 11.5% 12.5%

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