The Caribou Pipeline Company projects a pattern of inflows from the investment shown in the following table. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others.

Year 1							Year 5							Year 10
Cash Inflow			Probability				Cash Inflow			Probability				Cash Inflow			Probability
	65			0.40				40			0.35				30			0.30
	90			0.20				90			0.30				90			0.40
	115			0.40				140			0.35				150			0.30

The expected value for all three years is $90.

c. Assuming a 10 percent and 20 percent discount rate, complete the table for present value factors. (Round the final answers to 3 decimal places.)

Year	PVIF 10 Percent	PVIF 20 Percent	Difference
1	0.909	0.833	0.076
5
10

e-1. Assume the initial investment is $105. What is the net present value of the expected values of $90 for the investment at a 20 percent discount rate?(Round "PV Factor" to 3 decimal places. Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 1 decimal place.)

Net present value $

e-2. Should the investment be accepted?

multiple choice

• Yes

• No