Probability and Expected Cash Flow in Marketing Management
Not what you're looking for?
Cooper Construction is considering purchasing new, technologically advanced equipment. The equipment will cost $625,000 with a salvage value of $50,000 at the end of its useful life of 10 years. The equipment is expected to generate additional annual cash inflows with the following probabilities for the next ten years:
Probability
Cash Flow
0.15
60,000
0.25
85,000
0.45
110,000
0.15
130,000
a) What is the expected cash flow?
b) Cooper's cost of capital is 10%. What is the expected net present value?
c) Should Cooper buy the equipment?
Purchase this Solution
Solution Summary
A detailed step-by-step calculation of Expected Cash Flow and Net Present Value in Marketing Management provides students with a clear perspective of these complicated topics.
Education
- MSc, Osmania University
- MSc, Indian Institute of Technology - Roorkee (I.I.T.-ROORKEE)
- BSc, Banaras Hindu University
Recent Feedback
- "Very fast turnaround. Excellent communication! Much appreciated!"
- "excellent"
- "excellent"
- "excellent work"
- "Fantastic..great solution and very well explained!!!!"
Purchase this Solution
Free BrainMass Quizzes
Exponential Expressions
In this quiz, you will have a chance to practice basic terminology of exponential expressions and how to evaluate them.
Graphs and Functions
This quiz helps you easily identify a function and test your understanding of ranges, domains , function inverses and transformations.
Multiplying Complex Numbers
This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.
Probability Quiz
Some questions on probability
Solving quadratic inequalities
This quiz test you on how well you are familiar with solving quadratic inequalities.