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Note- 1) Please solve it using Decision tree analysis. 2) Please solve it step...

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Finance

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Note- 1) Please solve it using Decision tree analysis.

2) Please solve it step by step as I am not good at Finance

3) The table above appears split but is actually one.

11.X Limited is considering the purchase of a new plant requiring a cash outlay of Rs. 20,000. The plant is expected to have a useful life of 2 years without any salvage value. The cash flows and their associated probabilities for the two vears are as follows l vear l vear Cash flow Year Probability Cash Flow Probability 1 8000 0.3 4000 0.2 10,000 15,000 13,000 15,000 16,000 16,000 20.000 24,000 0.6 0.2 0.3 0.4 0.3 0.1 0.8 0.1 11,000 0.4 15,000 0.3 Presuming that 10% is the cost of capital, calculate the NPV of the Project under different conditions of cash flows and suggest whether the Project should be taken up or not

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