A firm expects an NPV of ₹8,000 if the economy is exceptionally strong (30% probability), an NPV of ₹4,000 if the economy is normal (40% probability), and an NPV of ₹2,000 if the economy is exceptionally weak (30% probab

CS Executive · Financial and Strategic Management · PYQS · December 2020
A firm expects an NPV of ₹8,000 if the economy is exceptionally strong (30% probability), an NPV of ₹4,000 if the economy is normal (40% probability), and an NPV of ₹2,000 if the economy is exceptionally weak (30% probability). Expected Net present value is ............
(A) ₹5,200
(B) ₹6,000
(C) ₹5,000
(D) ₹4,600

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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