The initial cost of project

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The initial cost of a project is $10,000. There is a 30% chance that it will be highly successful, in which case cash inflows of $4,500 are expected for the next four years. There is a 70% chance that the project will be unsuccessful, in which case annual cash inflows of $3,200 are expected for four years. The cost of capital is 12%. What is the project’s expected NPV?

a. $3,688 b. ($281) c. $7,700 d. $904

Reference no: EM13925498

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