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Calculating the NPV of a two-period project

A two-period project has the following probabilities and cash flows. The discount rate is 7%, and the initial investment is $1,000. How much is the expected NPV of this project?

Probability Cash Flow
Period 1: 10/3% 400
90% 500
20/3% 700

Period 2: 5% 300
5% 500
90% 700

Solution Preview

Initial Cash Flow=CFo=-$1000
Expected Cash Flow in Year ...

Solution Summary

Solution describes the steps to estimate the NPV of a two period project.

$2.19