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