Economists at Rudy Investments Estimate a 20% Probability of a Recession

Multiple Choice

Economists at Rudy Investments estimate a 20% probability of a recession next year, a 50% probability of an average economy, and a 30% probability of a rapid expansion.If there is a recession, the NPV of project O will be $20 million; if the economy is average, it will be $45 million and in case of a rapid expansion, it will be $75 million.What is the expected NPV of the project?

A) $57.5 million
B) $49 million
C) $46.67 million
D) $45 million