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For questions 10 and 11, use the following information. The Quick-Start Company has the following pattern of potential cash flows with its planned investment in

For questions 10 and 11, use the following information.The Quick-Start Company has the following pattern of potential cash flows with its planned investment in a new cold weather starting system for fuel injected cars.

If the company has a discount rate of 17%, what is the expected NPV of the project at node B at time 1?

A.$76 million

B.$120 million

C.$88.03 million

D.$150.43 million

E.$50.43 million

If the company has a discount rate of 17%, what is the expected NPV at node A at time 0? Should it decide to invest?

A.no,expected NPV at node A= $-41.33 million

B.no, since more than one branch has $0 cash flow, the firm must reject.

C.yes,expected NPV at node A= $25.6 million

D.yes, expected NPV at node A = $5.86 million

E.yes,expected NPV at node A= $100 million

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