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New Future plc is considering taking on a two-year project with an initial investment cost of 25m. There are three possible outcomes for both years.
New Future plc is considering taking on a two-year project with an initial investment cost of 25m. There are three possible outcomes for both years. The present values of the cash flows and their associated probabilities are as follows: Year 1 Year 2 Probability PV of Cash Flow Probability PV of Cash Flow 0.3 7m 0.3 9m 0.5 11m 0.3 12m 0.2 14m 15m What is the probability of a positive NPV for the project? O A. 40% B. 30% O c. 34% OD.14% O E 28% New Future plc is considering taking on a two-year project with an initial investment cost of 25m. There are three possible outcomes for both years. The present values of the cash flows and their associated probabilities are as follows: Year 1 Year 2 Probability PV of Cash Flow Probability PV of Cash Flow 0.3 7m 0.3 9m 0.5 11m 0.3 12m 0.2 14m 0.4 15m What is the probability of a positive NPV for the project? O A. 40% O B. 30% O C.34% OD.14% E. 28%
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