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A Project with a 3-Year Life Has the Following Probability

Question 5

Multiple Choice

A project with a 3-year life has the following probability distributions for possible end of year cash flows in each of the next three years: A project with a 3-year life has the following probability distributions for possible end of year cash flows in each of the next three years: Using an interest rate of 8 percent, find the expected present value of these uncertain cash flows.(Hint: Find the expected cash flow in each year, then evaluate those cash flows.) A) $1,204.95 B) $835.42 C) $1,519.21 D) $1,580.00 E) $1,347.61 Using an interest rate of 8 percent, find the expected present value of these uncertain cash flows.(Hint: Find the expected cash flow in each year, then evaluate those cash flows.)


A) $1,204.95
B) $835.42
C) $1,519.21
D) $1,580.00
E) $1,347.61

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