What is the expected net present value of the investment

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We think there are three possible outcomes next year for the launch of Lemonade Inc.'s Smoothie business. There is a 20% chance of an explosion in activity and growth resulting in an NPV of $12,000; a 40% chance of a rapid growth resulting in an NPV of $8,000; a 25% chance of a slow recovery of activity resulting in an NPV of $800; and a 15% chance that the campus will remain deserted in the near future resulting in a NPV of -$6,000.

What is the expected net present value of the investment?

Reference no: EM132928473

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