Considering a potential investment project

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Your firm is considering a potential investment project, and your finance group has prepared the following estimates: and NPV of $10 million if the economy is strong (30% probablility), and NPV of $4 million if the economy is normal (50% probablility and an NPV of -$2 million if the economy is poor (20% probablility). What is the expected value of NPV (to the nearest dollar) for the following situation? a. $3.4 million b. $4.0 million c. $4.6 million d. $5.2 million

Reference no: EM13832552

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