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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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