90.2K

Verified Solution

Link Copied!

The Blazingame 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 distributions. All dollar figures are in thousands. Blazingame's cost of capital is 12%. C1 C2 C3 Probability .25 $50 $40 $75 60 80 80 .50 70 120 85 .25 a. Estimate the project's most likely NPV by using a point estimate of each cash flow. Do not round intermediate calculations. Round the answer to the nearest whole dollar. Enter your answer in dollars and not in thousands of dollars. For example, an answer of $1 thousand should be entered as 1,000 not 1. $ -711 What is the probability of the project's most likely NPV? Do not round intermediate calculations. Round the answer to the six decimal places. 0.50 x b. What is the best possible NPV? Do not round intermediate calculations. Round the answer to the nearest whole dollar. Use a minus sign to indicate a negative NPV. Enter your answer in dollars and not in thousands of dollars. For example, an answer of $1 thousand should be entered as 1,000 not 1. $ 43,6657 What is the worst possible NPV? Do not round intermediate calculations. Round the answer to the nearest whole dollar. Use a minus sign to indicate a negative NPV. Enter your answer in dollars and not in thousands of dollars. For example, an answer of $1 thousand should be entered as 1,000 not 1. $ -45,086 What is the probability of best possible NPV? Do not round intermediate calculations. Round the answer to the six decimal places. 0.25 x What is the probability of worst possible NPV? Do not round intermediate calculations. Round the answer to the six decimal places. 0.25 x

Answer & Explanation Solved by verified expert

See Answer