Suppose you are trying to decide whether you want to undertake a R&D project. the initial investment is $50 million. The upcoming costs are uncertain and there are three possibilities equally likely: Low cost (of $70 million) Medium cost (of $120 million) High cost (of $200 million) The expected revenue is going to be $160 million for a very long time. Find the NPV of the project and decide if you should invest the $50 million today!