Expected value analysis: San Lucas Corporation San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of robotic machinery $4,000,000 Residual value Useful life $300,000 10 years Assume San Lucas Corporation assigns the following probabilities to the estimated annual net cash flows: Annual Net Cash Flow $900,000 700,000 500,000 Total Probability of Occurring 0.10 0.50 0.40 1.00 a. Compute the expected value of the annual net cash flows. Annual Net Cash Flow $900,000 Expected Value $ 700,000 500,000 Total b. Determine the expected net present value of the equipment, assuming a desired rate of return of 10% and the expected annual < Expected value analysis: San Lucas Corporation San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of robotic machinery $4,000,000 Residual value Useful life $300,000 10 years Assume San Lucas Corporation assigns the following probabilities to the estimated annual net cash flows: Annual Net Cash Flow Probability $900,000 700,000 500,000 Total of Occurring 0.10 0.50 0.40 1.00 a. Compute the expected value of the annual net cash flows. Annual Net Cash Flow $900,000 Expected Value $ 700,000 500,000 Total b. Determine the expected net present value of the equipment, assuming a desired rate of return of 10% and the expected annual