Question

the firm expects an npv of rupees 10000 if the economy is exceptionally strong 30% probability and npv of rupees 4000 if the economy is normal 40% probability and an npv of rupees 2,000 if the economy is exceptionally weak 30% probability expected NPV is....a 5200 b 6000 c 5000 d 6200.​

Answer 1

Step-by-step explanation:

Expected NPV = 10,000×30/100 + 4000×40/100+ 2000×30/100

= 3000+1600+600

= 5200

So the Expected NPV is option (a) 5200

Answer 2

The expected Net present value is an option (a) 5200

GIVEN: 30% of a Strong Economy

             The expected NVP is 10000
TO FIND: Net present value when the Economy is weak at 30%
SOLUTION:

As we know,

Net present value (NPV) refers to the difference between the present value of cash inflows of the firm and the present value of cash outflows over some time for the firm.
According to the question,

• The firm expects an NPV of rupees 10000 if the economy is exceptionally strong 30% probability.
• NPV of rupees 4000 if the economy is normal 40% probability.
• NPV of rupees 2,000 if the economy is exceptionally weak 30%.

Then,

As we know,

Expected NPV = 10,000×30/100 + 4000×40/100+ 2000×30/100

                         = 3000+1600+600

                         = 5200

So the Expected NPV is option Rs.5200.

#SPJ2

Similar Question:

https://brainly.in/question/47409624?referrer=searchResults

https://brainly.in/question/52324830?referrer=searchResults