A project requires investment of 160000 dollar at year zero


A project requires investment of 160,000 dollar at year zero. There are 4 possible outcomes anticipated for this investment:

1) 25% probability of success with annual income of 40,000 dollars for 10 years (starting from year 1 to year 10) and zero salvage value

2) 40% probability of success with annual income of 30,000 dollars for 10 years (starting from year 1 to year 10) and zero salvage value

3) 20% probability of success with annual income of 20,000 dollars for 10 years (starting from year 1 to year 10) and zero salvage value

4) 15% probability of failure with zero annual income and salvage value of 70,000 dollar in the end of year 1.

Calculate ENPV, considering minimum ROR 8%, explain if this is a good investment. Explain your work in detail including all the required equations and calculations.

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Financial Management: A project requires investment of 160000 dollar at year zero
Reference No:- TGS01401113

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