Mark is considering making an irreversible investment costing $1,800. The proposed project has no operating costs, and w

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Mark is considering making an irreversible investment costing $1,800. The proposed project has no operating costs, and w

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Mark Is Considering Making An Irreversible Investment Costing 1 800 The Proposed Project Has No Operating Costs And W 1
Mark Is Considering Making An Irreversible Investment Costing 1 800 The Proposed Project Has No Operating Costs And W 1 (13.39 KiB) Viewed 28 times
Mark is considering making an irreversible investment costing $1,800. The proposed project has no operating costs, and will produce 120 units of output per annum in perpetuity, starting one year after the investment cost is incurred. The price at which the output can be sold will either be $3 per unit, with probability of 70%, or $5 per unit, with probability 30%. Assume the discount rate is 10% per annum. What is the expected NPV of the project if it is undertaken now? (Provide your answer to 2 decimal places. Do not include "$" in your response.)
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