Answer:
Expected value NPV =$-,7434
Step-by-step explanation:
The Expected Net present value (NPV) is the difference between the Present value (PV) of Expected value cash inflows and the PV of cash outflows. A positive NPV implies a good and profitable investment project and a negative figure implies the opposite.
Expected value NPV = PV of expected value cash inflow - PV of cash outflow
Present value of cash inflow:
The expected cash in flows is the sum of the cash inflows multiplied by their respective probabilities. For Tolbotics it is calculated as follows:
Expected cash inflows=m (29,500× 0.5) + (2,000× 0.5)=15,750
NPV = 15,750× (1-1.14^(-3)/0.14) - 44,000=-7434.
Expected value NPV =$-7,434