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Question 13 Not yet answered Points out of 3.75 P Flag question (NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO THE NEAREST
Question 13 Not yet answered Points out of 3.75 P Flag question (NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO THE NEAREST DOLLAR, for instance as 10023, not as $10,022.78. Insert the negative sign in front of your answer if it is negative. Do not round intermediate calculations!) Supersmart Consulting PPL is evaluating a client's proposed project. The project's initial investment is $56,000, and the project is expected to last for 2 years. Two scenarios were identified for each year of the project, an optimistic one and a pessimistic one. The probability that the project will go well in year 1 is 61%. If this is the case the project will bring $42,000 in year 1, and there would then be a 70% probability it will bring $62,000 in year 2, and a 30% probability it will bring $22,000 in year 2. The probability that the project will go poorly in year 1 is 39%. If this is the case the project will bring $11,000 in year 1, and there would then be a 11% probability it will bring $51,000 in year 2, and a 89% probability it will bring $21,000 in year 2. Assuming 9% cost of capital, compute the expected net present worth of the project. Ad GO
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