Question

project has a 20% chance of a R100 000 profit, a 45% chance of 130 000...

project has a 20% chance of a R100 000 profit, a 45% chance of 130 000 profit and a 25% chance of a R60 000 loss, what is the expected value for the project?

Business   Operations-Management   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Given that,

20% chance of a R100 000 profit

45% chance of R130 000 profit

25% chance of a R60 000 loss

Expected value for the project = 1,00,000*20% + 1,30,000*45% - 60,000*25%

= 1,00,000*0.2+ 1,30,000*0.45 - 60,000 * 0.25

= 20,000 + 58, 500 - 15, 000

=R63,500

______________________________________________

Please Please up vote this answer. I explained clearly step by step. Please please up vote. Thank you so much.

Your up vote is so valuable to me. Please.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
a project has 60% chance of a $100,000 profit and a 40% of a $100,000 loss....
a project has 60% chance of a $100,000 profit and a 40% of a $100,000 loss. Afted explicitly righting the formula, calculate tge expected montery value for the project. would you select this project and why? based on the results you get?
An investor, has recently acquired R100 000 in cash through the sale of a previously owned...
An investor, has recently acquired R100 000 in cash through the sale of a previously owned business. The investor made a profit of R1 000 000 from the sale of the business and has decided that he/she will invest R100 000 of the R1 000 000 in one of two investment opportunities, namely Investment 1 or Investment 2. The investor plans to use this investment as part of their retirement savings, noting that the investor plans to retire in 2...
An investor, has recently acquired R100 000 in cash through the sale of a previously owned...
An investor, has recently acquired R100 000 in cash through the sale of a previously owned business. The investor made a profit of R1 000 000 from the sale of the business and has decided that he/she will invest R100 000 of the R1 000 000 in one of two investment opportunities, namely Investment 1 or Investment 2. The investor plans to use this investment as part of their retirement savings, noting that the investor plans to retire in 2...
Delta LTD has current assets of R100 000,net non-current assets of R290 000,current liabilities of R64...
Delta LTD has current assets of R100 000,net non-current assets of R290 000,current liabilities of R64 000 and long term debt of R170 000 . What is the owner’s equity for Delta LTD and how much is the net working capital (NWC)
For the coming year, Stock A has a 10% chance of losing 25%, a 20% chance...
For the coming year, Stock A has a 10% chance of losing 25%, a 20% chance of making 6%, a 60% chance of making 25% and a 10% chance of making 50%. What is Stock A’s expected return? A. 14.00% B. 18.70% C. 23.70% D. 26.50% If a stock has a 30% chance of losing 18%, a 40% chance of losing only 3%, and a 30% chance of making 15%, what is the expected return of this stock? A. -2.10%...
1.preston inc. stock has a 20%chance of producing a 45% return, a 50% chance of producing...
1.preston inc. stock has a 20%chance of producing a 45% return, a 50% chance of producing a 9% return, and a 30% chance of producing a -28% return. what is the firm's standard deviation of return 2. microsoft annual stock returns for the last five years are: 20.79%, 40.75%. 15.07%, 22.69% and 27.58% what is microsoft coefficient of variation for this time period
You plan a certain project. There is a 35% chance that you will lose $30,000, a...
You plan a certain project. There is a 35% chance that you will lose $30,000, a 40% chance you will break even, and a 25% chance that you will make $55,000. What is the expected value of your investment? Do not round.
You have recently been appointed as a pension fund specialist for your company and you have...
You have recently been appointed as a pension fund specialist for your company and you have been tasked to perform valuation on some of the pension fund portfolios. Your company wants to know the minimum annual return required on the pension fund in order to make all required payments over the next five years and not diminish the current asset base. The fund currently has assets of R500 million. Required: 3.1 Determine the rate of return if outflows are expected...
You estimate that AE Corp has a 20% chance of generating 30% returns, a 20% chance...
You estimate that AE Corp has a 20% chance of generating 30% returns, a 20% chance of generating -40% returns, and a 60% chance of generating 10% returns. What are the expected returns and standard deviation of AE Corp? Acme Inc. plans to pay a $1/share dividend on a quarterly basis. What is the price of their shares given a 12% annually compounded cost of capital? What if the firm plans to increase its dividend by 5% every yea
13-2 a. Project X has an up-front cost of $20 million. The project is expected to...
13-2 a. Project X has an up-front cost of $20 million. The project is expected to produce after-tax cash flows of $7.5 million at the end of each of the next 3 years (t = 1, 2, and 3). The project has a WACC=10%. What is the project’s NPV? b. However, if the company waits a year they will find out more about the project’s expected cash flows. If they wait a year, there is a 50% chance the market...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT