Project's expected net present value
Not what you're looking for?
Oklahoma Instruments
Oklahoma Instruments (OI) is considering a project that has an up-front cost of $250,000. The project's subsequent cash flows critically depend on whether its products become the industry standard. There is a 50 percent chance that the products will become the industry standard, in which case the project's expected cash flows will be $110,000 at the end of each of the next five years. There is a 50 percent chance that the products will not become the industry standard, in which case the project's expected cash flows will be $25,000 at the end of each of the next five years. Assume that the cost of capital is 12 percent.
Refer to Oklahoma Instruments. Based on this information, what is the project's expected net present value?
Purchase this Solution
Solution Summary
This explains the computation of project's expected net present value
Solution Preview
Oklahoma Instruments
Oklahoma Instruments (OI) is considering a project that has an up-front cost of $250,000. The project's subsequent cash flows critically depend on whether its products become ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.