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Durrance Company assigned the following likelihoods to the possible annual net cash flows of a proposed investment: Annual Net Probability of Occurring Cash Flow 0.60

Durrance Company assigned the following likelihoods to the possible annual net cash flows of a proposed investment:

Annual Net Probability of Occurring

Cash Flow 0.60

$700,000 0.25

600,000 0.15

500,000

Using expected value analysis, what is the expected value of the annual net cash flow?

a.$420,000

b.$645,000

c.$700,000

d.$600,000

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