A two-period project has the following probabilities and cash flows:
A two-period project has the following probabilities and cash flows:
Probability Cash flow
Period 1: .25 500
.50 600
.25 700
Period 2: .30 300
.50 500
.20 700
The discount rate is 7%, and the initial investment is $1,000. How much is the expected NPV of this project?
ANSWER
($20.00)
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