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please assist Jebby's Dance Studios is considering the purchase of new sound equipment that will enhance the popularity of its aerobics dancing. he equipment will
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Jebby's Dance Studios is considering the purchase of new sound equipment that will enhance the popularity of its aerobics dancing. he equipment will cost $15,800. Debby is not sure how many members the new equipment will attract, but she estimates that her ncreased annual cash flows for each of the next five years will have the following probability distribution. Debby's cost of capital is 13 sercent Use Appendix D for an approximate answer but calculate your final answers using the formula and financial calculator nethods. a. What is the expected value of the cash flow? The value you compute will apply to each of the five years. b. What is the expected net present value? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. c. Should Deboy buy the new equipment Step by Step Solution
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