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Debby's Dance Studios is consideting the purchase of new sound equipment that will enhance the popularity of its aerobics dancing: The equipment wil cost $20,000.
Debby's Dance Studios is consideting the purchase of new sound equipment that will enhance the popularity of its aerobics dancing: The equipment wil cost $20,000. Debby is not sure how many members the new equipment will attract, but she estimates that her increased annual cash flows for each of the next five years will have the following probability distribution. Debby's cost of capital is 12 percent. Use Apgendix R for an approximate answer but caiculate your final answers using the formula and financial calculator methods What is the expected value of the cash flow? The value you compute will apply to each of the five years b. What is the expected net present value? Note: Negotive amount should be indicated by o minus sign. Do not round intermedlate calculations and round your answer to 2 decimel pleces. c. Shouid Debby buy the new equipment? No Yes Tv4=AB1)(A+ing(i)
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