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A Project Requires an Initial Investment of $1,000,000

Question 103

Multiple Choice

A project requires an initial investment of $1,000,000. In one year, there is a 40% chance of a $950,000 return; a 50% chance of a $1,200,000 return; and a 10% chance of a $2,000,000 return. What is the project's expected return one year from now?


A) 12.8%
B) 15.5%
C) 18.0%
D) 38.3%

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