Question

determine the favourable decision for two projects: cost- 100000, cash inflow- 1st yr. 20000, 2nd yr 25000, 3rd yr30000, 4th yr 40000, 5th yr 30000, certainty equivalent 90%, 80%, 75%, 80%, 70%, favourable probability 30%, 20%, 10%, 20%, 20%, project 2- cash outflow- 100000, cash inflows- 30000, 20000, 50000, 40000, 30000, certainty equivalent- 80%, 70%, 90%, 70%, 80%, probability- 30%per annum each year.

Answer 1

10000 20000 25000 30000 90 80