Question
In an environment where cash flows are interconnected; (complete dependency) investment cost 200.000 TL, economic life 1 year, Net cash flows of project X with
In an environment where cash flows are interconnected; (complete dependency)
investment cost 200.000 TL,
economic life 1 year,
Net cash flows of project X with a discount rate of 10% are as follows:
20% chance of 10,000 TL
30% chance of 25,000 TL
35% chance of 15,000 TL
15% chance of 70.000 TL
The economic life of the Y project, which is possible together with the X project, is again 2 years, the investment cost is 150,000 TL and the discount rate is 10%.
The net cash flows of project Y are
1st year is 40% probability 60,000 TL and 60% probability 40,000 TL.
Year 2 net cash flows of Project Y will be 50,000 TL for sure.
Specify which project or projects will be accepted/rejected by making the calculations.
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