of A firm is considering a new project that has a cost of $2…

of A firm is considering a new project that has a cost of $2,000. The best case scenario happens with probability 0.3, and produces three cash flows of S900 at t=1, 2, 3. With probability of 0.6 the base case scenario produces cash flows of $700 for the next three years. With the remaining probability the worst case scenario leads to negative cash flow of-$250 at time 1. After time 1 in the worst scenario the company can abandon the project with a salvage value of 1,500. Assume that WACC is 8%. 4. a. What is the expected NPV of the new project?
of A firm is considering a new project that has a cost of $2…

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