The estimated annual cash flow of an investment project along with associated probabilities are given below. Determine the expected present worth of this annual cash flow series at an interest rate of 11% per year. $$\begin{array} { | l | l | l | l | }
\hline \text { Year } & P = 0.5 & P = 0.4 & P = 0.1 \
\hline 0 & \$- 57,000 &- \$ 59,000 &- \$ 57,500 \
\hline 1 & \$ 3100 & \$ 3000 & \$ 3100 \
\hline 2 - 6 & \$ 3250 & \$ 3000 & \$ 3100 \
\hline 7 & \$ 3400 & \$ 6000 & \$ 3100 \
\hline
\end{array}$$

Question

The estimated annual cash flow of an investment project along with associated probabilities are given below. Determine the expected present worth of this annual cash flow series at an interest rate of 11% per year. $$\begin{array} { | l | l | l | l | } 
\hline \text { Year } & P = 0.5 & P = 0.4 & P = 0.1 \
\hline 0 & \$- 57,000 &- \$ 59,000 &- \$ 57,500 \
\hline 1 & \$ 3100 & \$ 3000 & \$ 3100 \
\hline 2 - 6 & \$ 3250 & \$ 3000 & \$ 3100 \
\hline 7 & \$ 3400 & \$ 6000 & \$ 3100 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer is E(PW) = - $42,530.59

The Estimated Annual Cash Flow of an Investment Project Along