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Initial investment required for a project is estimated $65,000.There is 40% probability of

Initial investment required for a project is estimated $65,000.There is 40% probability of

Initial investment required for a project is estimated $65,000.There is 40% probability of success and 60% probability of failure.In case of success, initial investment at present time yields theannual income of $22000 for six years, from first to sixth yearwith zero salvage value. In case of failure, there will be salvagevalue of $50,000 at the end of first year without any annualincome. Considering minimum ROR 8%, calculate the expectedNPV and explain if this investment is satisfactory. Explain yourwork in detail including all the required equations andcalculations.

Abhinav 04-Dec-2019

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