The firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years. Based on the above data, what is the project's net present value?

Assuming that all cash flows are discounted at 10%, if NPC chooses to wait a year before proceeding, how much will this increase or decrease the project's expected NPV in today's dollars (i.e., at t = 0), relative to the NPV if it proceeds today?

26) The firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years.
Assuming that all cash flows are discounted at 10%, if NPC chooses to wait a year before proceeding, how much will this increase or decrease the project's expected NPV in today's dollars (i.e., at t = 0), relative to the NPV if it proceeds today?

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Status NEW Posted 03 Aug 2017 01:08 PM My Price 6.00

Exp-----------ect-----------ed -----------val-----------ue -----------of -----------cas-----------h f-----------low----------- = -----------75%-----------*50-----------0 +----------- 25-----------%*2-----------5 =----------- 38-----------1.2-----------5 Y-----------ear----------- Ca-----------sh -----------flo-----------w I-----------ntr-----------est----------- ra-----------te -----------Dis-----------cou-----------nte-----------d c-----------ash----------- fl-----------ow -----------0 ------------150-----------0 1-----------0% ------------15-----------00 -----------1 3-----------81.-----------25 -----------10%----------- 34-----------6.5-----------909----------- 2 -----------381-----------.25-----------

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