The Estimated Annual Cash Flow of an Investment Project Along

question 2

Short Answer

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. $$\begin{array} { | l | l | l | l | } \hline \text { Year } & P = 0.5 & P = 0.4 & P = 0.1 \\\hline 0 & \$- 57,000 &- \$ 59,000 &- \$ 57,500 \\\hline 1 & \$ 3100 & \$ 3000 & \$ 3100 \\\hline 2 - 6 & \$ 3250 & \$ 3000 & \$ 3100 \\\hline 7 & \$ 3400 & \$ 6000 & \$ 3100 \\\hline\end{array}$$

---

Definitions:

Fortuitous Event

An event happening by chance or accident, often beyond an individual's control, influencing situations or outcomes in unexpected ways.

Bandura's Theory

Focuses on how people learn by observing others, emphasizing the importance of modeling, imitation, and social influences in learning.

Personality Theories

A set of approaches and models aimed at explaining the variations in individuals' thoughts, feelings, and behaviors by outlining differing personality types and traits.

Radical Behaviorism

A perspective in psychology, advanced by B.F. Skinner, that views behavior as a subject of natural science without recourse to inner psychological events.