Question
Q11. A 2-year project costs $500 and promises the following cash flows: Scenario Probability Year 1 Year 2 a booming success 20% $1,000 $800 a
Q11. A 2-year project costs $500 and promises the following cash flows:
| Scenario | Probability | Year 1 | Year 2 |
| a booming success | 20% | $1,000 | $800 |
| a moderate success | 30% | $500 | $300 |
| barely survive | 40% | $100 | $50 |
| fail entirely | 10% | -$500 | -$500 |
The appropriate discount rate is 10% per annum. Should you invest in this project?
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Authors: S. Platt
1st Edition
113733729X,1137337303
