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# The blazzinggame corporation is considering a three year project that has an initial cash outlay (Co) of \$175,000 and three cash inflows that are

The blazzinggame corporation is considering a three year project that has an initial cash outlay (Co) of \$175,000 and three cash inflows that are defined by the following independent probability distrubutions. All dollars figures are in thousands, blazzingame cost of capital is 10%. C1: \$50, \$60, \$70 Probabilty. 25

C2: \$40, \$80, \$120  probability . 50

C3: \$75, \$80, \$85: proablity .25     the questions are A: estimate the projects most likely NPV using a point estimate of each cash flow. what is the probability.

B What are the best and worst possible NPV's? what are the probablities?

c. Choose a few outcome random, calculate their NPV and associated probability and sketch the probability distrubution of the project NPV

Although the problem asks for only a few outcomes, we'll list them all and identify the best, worst, and most likely. First... View the full answer

Although the problem asks for only a few outcomes, we'll list them all and identify the
best, worst, and most likely. First restate the matrix of outcomes by multiplying each
Ci by PVF10,i and...

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