A project with a 3-year life has the following probability distributions for possible end-of-year cash flows in each of the next three years?
Year 1
Prob 0.30 Cash Flow $300
Prob 0.40 Cash Flow $500
Prob 0.30 Cash Flow $700
Year 2
Prob 0.15 Cash Flow $100
Prob 0.35 Cash Flow $200
Prob 0.35 Cash Flow $600
Year 2
Prob 0.25 Cash Flow $200
Prob 0.75 Cash Flow $800
Prob 0.15 Cash Flow $900
Using an interest rate of 8 percent, find the expected present value of these uncertain cash flows.
(Hint:Find the expected cash flow in each year, then evaluate those cash flows.)
a.$1,204.95
b.$835.42
c.$1,519.21
d.$1,580.00
e.$1,347.61
Would like to see calculator solution please.