What is the expected value of the net present value

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The estimated cash flows for a new product is as follows: An immediate cost (negative cash flow) of $100,000 A payoff (positive cash flow) of X dollars at end of year four, where X is a random variable with possible values of $200,000, $239,000, or $278,000 with probabilities 0.2, 0.5, and 0.3 respectively. What is the expected value (average) of the net present value of these cash flows? Use a 5% discount rate. (Provide two significant digits after the decimal point)

Reference no: EM131629986

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