A project requires initial investment of $300,000 at the present time. There are two possible outcomes for this project:
• Success: The annual revenue of $50,000 for 8 years and the salvage value of $150,000 at the end.
• Failure: Zero annual revenue and the salvage value of 200,000 at the end of year 2.
Find the minimum success probability to make this project economically satisfactory.
Assume 12% minimum interest rate of return.