Q161 BPP

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September 17, 2020 at 6:25 am #585876
thuyly134
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Hi John,
I don’t understand the answer in Q161. How to calculate expected NPV, example their answer is total PV =2,487, joint probabilities is 0.03 => NPV= (1,013). Please help me how to get this (1,013). I don’t see the working/explanation for this in the answer.
Thank you so much!!!
September 17, 2020 at 11:22 am #585909
John Moffat
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It is the total PV of the inflows (2,487) less the initial cost (3,500).
2487 – 3500 = (1,013)
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