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Please provide me in the format of enpv table as per below: Juliana Bhd is concerned about the risk associated with a proposed investment and
Please provide me in the format of enpv table as per below:
Juliana Bhd is concerned about the risk associated with a proposed investment and is looking for ways to incorporate risk into its investment appraisal process. The company has heard that probability analysis may be useful in this respect and so the following information relating to the proposed investment has been prepared: Year 1 Cash flow Probability 2,000,000 0.2 3,000,000 0.3 5,000,000 0.5 Year 2 Cash flow Probability 2,500,000 3,500,000 6,500,000 0.3 0.5 0.2 However, the company is not sure how to interpret the results of an investment appraisal based on probability analysis. The proposed investment will cost RM5-2m, payable in full at the start of the first year of operation. Juliana Bhd uses a discount rate of 13% in investment appraisal. Required: (a) Using a joint probability table: Calculate the mean (expected) NPV of the proposed investment; (8 marks) ii) Calculate the probability of the investment having a negative and positive NPV; (i) Calculate the NPV of the most likely outcome; (iv) Comment on the financial acceptability of the proposed investment. Year Prob Prob Total PV Joint Probability PV*JP NPV NPV PV of cf 1 0.13 1769.911504 PV of c/f1 0.2 0.3 0.06 0.5 0.2 PV of c/f 2 2654.867257 0.3 PV of cf 2 0.13 1957.866708 2741.013392 5090.453442 1957.866708 2741.013392 5090.453442 1957.866708 2741.013392 5090.453442 0.3 0.5 3727.778213 4510.924896 6860.364946 4612.733965 5395.880648 7745.320699 6382.645469 7165.792153 9515.232203 0.1 0.04 0.09 0.15 0.06 0.15 0.25 0.2 223.6666928 451.0924896 274.4145979 415.1460569 809.3820973 464.7192419 957.3968204 1791.448038 951.5232203 6338.789255 5200 PV of c/f 3 4424.778761 0.5 0.3 0.5 0.2 0.1 1 Initial Investment ENPV 1138.789255Step by Step Solution
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