A Risky $500,000 Investment Is Expected to Generate the Following $$\begin{array} { l c c c } \text { Year } & 1 & 2 & 3 \\& \$ 250,000 & \$ 266,667 & \$ 285,715 .\end{array}$$

question 11

Essay

A risky $500,000 investment is expected to generate the following cash flows:​ $$\begin{array} { l c c c } \text { Year } & 1 & 2 & 3 \\& \$ 250,000 & \$ 266,667 & \$ 285,715 .\end{array}$$ ​
The probability of receiving each cash inflow is 80, 75, and 70 percent, respectively. If the firm's cost of capital is 10 percent, should the investment be made?

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