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The cost of an investment is $50,000. There is a 60% chance that the investment will generate sales of $10,000 per year once in place
The cost of an investment is $50,000. There is a 60% chance that the investment will generate sales of $10,000 per year once in place for the foreseeable future. You will get to know if the venture is successful or a failure in a years time. If the venture fails it will only make $5000 per year. If the investment fails you have the option of selling off the investment for $35000. The market cost of capital is 10%. Find the NPV of the project
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