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

question 37

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%