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Your company is considering a project with an initial outlay of $1,000 in year zero and the following cash flows over the next 4 years:

Your company is considering a project with an initial outlay of $1,000 in year zero and the following cash flows over the next 4 years:

Year

Cash flow

1

200

2

300

3

400

4

500

Assuming cost of capital is 11%:

Use Scenario manager to calculate Expected NPV (format your answer to 2 decimal places) given the following three scenarios and their probabilities of occurrence:

Scenario

Cost of capital

Probability

Best case scenario

9%

25%

Most likely case Scenario

11%

55%

Worst case scenario

13%

20%

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