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Your company is obligated to dispose of toxic material after operating activities are over in production site, 7 years from now. The cash flow possibilities
Your company is obligated to dispose of toxic material after operating activities are over in production site, 7 years from now. The cash flow possibilities and probabilities for the costs are as follows: $200,000, 25% $300,000, 30% $400,000, 45% The risk free rate is 8%, but an advisor suggests using also a risk premium equal to 7% given the particular uncertainty surrounding the future outcomes. Using the expected cash flow method, which of the following amounts is closest to the liability that you must record at the beginning of the project for the expected costs? 186,717 O 249,100 O 199,280 O 120,301 150,376 0227,418 0233,396
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