Kereru Fisheries Ltd estimates that there is a 90% chance that stage 1 will meet all expectations and, consequently, that stage 2 will be undertaken. What is the expected NPV of Kereru Fisheries Ltd's rainbow trout project? Using Table 3 as a guide, construct a decision tree to help in your analysis. (Hint: You need to fill in the figures where indicated.)
TABLE 3
Rainbow trout project decision tree.
