Your Firm Is Considering Investing in a New Project

Multiple Choice

Your firm is considering investing in a new project.If the economy is strong (30% probability) ,you expect an NPV of $500,000; if the economy is normal (50% probability) ,you expect an NPV of $400,000; and if the economy is weak (20% probability) ,you expect an NPV of $300,000.What is the expected NPV of the project?

A) $390,000
B) $400,000
C) $410,000
D) None of the above