Decision Tree

successful, the project will be abandoned with zero salvage value.

sold for $$100,000.$ The managers estimate that the probability is $80\%$ that the boats will pass testing and that Stage $3$ will be undertaken.

would be $$1\mathrm{.}5$ million. Both net values occur at $t=3,$ and each state of the economy has a probability of $0\mathrm{.}5.$ YYC$\text{'}$s corporate cost of capital is $13\%.$

entered as $2,000,000.$ Round your answer to the nearest cent.

$

$2,000,000.$ Round the project's standard deviation to the nearest cent and $CV$ to two decimal places.

${}_{NPV}$:$

CVNP:

If YYC$\text{'}$s average project had a CV of between $1\mathrm{.}0$ and $2\mathrm{.}0,$ would this project be of high, low, or average stand$-$alone risk?

This project is of $-$ Select$-v$ risk.