Determine the expected net present value of the investment

Assignment Help Financial Management

Reference no: EM131457038

Assume $100,000 outlay for an investment with two possible payoffs: $100,000

.04 Probability $50,000

0.6 Probability $200,000

(a) Determine the expected net present value of the investment.

(b) What is the NPV of the worst event and what is the probability of it to occur?

Reference no: EM131457038

Questions Cloud

What is the sample variance of the portfolio : What is the sample variance of the portfolio with 50% of the funds invested in FC and 50% in MC.

Stock market will experience a substantial increase : An investor is convinced that the stock market will experience a substantial increase next year

International agricultural trade : Explain the difference between a small nation and large nation importer both in words and diagrammatically (use two-panel diagrams).

Which sections of writing plan do you feel most confident in : Which sections of your Writing Plan do you feel most confident in? Which sections of your Writing Plan do you feel least confident in?

Determine the expected net present value of the investment : Determine the expected net present value of the investment. What is the NPV of the worst event and what is the probability of it to occur?

Equilibrium associated with a period of expansion : If the economy is in a short run equilibrium associated with a period of expansion, explain why, based on the statement above

What are the assumptions underpinning this theory : Choose a middle-range theory or grand theory in nursing that, in your opinion, can be applied to research.

Laurie that derivatives serve vital business purpose : Laurie Seals and Julie Winn are roommate at Upland State College. How show Julie explain to Laurie that derivatives serve a vital business purpose?

What will the recruiting challenges be : FLSA - On December 1st, the federal annual salary threshold for employees exempt form overtime pay will double, increasing from $23.660 to $47,476.

User Account

All Pages