Solution-What is the expected present value of lydia nickels

What is the expected present value of lydia nickels

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Reference no: EM131109007

A cash flow of $200,000 may be received by Lydia Nickels, Inc. in one year, two years, or three years, with probabilities of 20%, 50%, and 30%, respectively.

The rate of interest on default risk-free investments is 5%. The present value factors are
PV of 1, at 5%, for 1 year is .95238
PV of 1, at 5%, for 2 years is .90703

PV of 1, at 5%, for 3 years is .86384 What is the expected present value of Lydia Nickels' cash flow (in whole dollars)?

Reference no: EM131109007

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What is the expected present value of lydia nickels

Reference no: EM131109007

Reference no: EM131109007

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