An investment of $27,000 is expected to generate annual revenue of $6,000 throughout its expected life .
The risk is based on the life investment. The estimate of probabilities for investment's life is given in the table below.
There is no salvage value. Using a value of 7.00% MARR state the expected value (EV) of the present worth associated with the purchase.
|
Life years
|
8
|
9
|
10
|
|
Probability
|
0.2
|
0.5
|
0.3
|