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Your team is evaluating two mutually exclusive projects. The initial cost of each investment is $50,000. The probability of the cash flows is shown below.

  1. Your team is evaluating two mutually exclusive projects. The initial cost of each investment is $50,000. The probability of the cash flows is shown below. If the project will have a 5 year life and the appropriate cost of capital is 9% calculate the following:

Probability

CF(A)

CF(B)

10%

(34,000)

(13,500)

25%

(8,500)

2,125

30%

17,000

19,000

25%

42,500

31,875

10%

68,000

46,750

  1. Expected value
  2. NPV
  3. Standard deviation
  4. IRR
  5. MIRR

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