The New Electronic Company is considering to make investment in a proposal which requires an outlay of Rs 1,20,000. The project has a life of three years over which the following cash inflows are likely to be generated

The management feels that the expected cash flows in the various periods may be considered to base its decision about acceptance or rejection of the project. If the discount rate is 10%, should the proposal be accepted?

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Year 1 Year 2 Year 3 Cash Flow Probability Cash Flow Probability Cash Flow Probability 30,000 0.2 30,000 0.1 40,000 0.3 40,000 0.4 50,000 0.4 60,000 0.3 50,000 0.3 80,000 0.4 80,000 0.2 60,000 0.1 90,000 0.1 1,00,000 0.2