A Company Faces a Hurdle Rate of 12

question 13

Multiple Choice

A company faces a hurdle rate of 12%. It has three possible outcomes to an investment opportunity: a realistic NPV of $17,500, an optimistic NPV of $21,300 and a pessimistic NPV of $4,530. The probabilities associated with the outcomes are 55%, 22% and 23%. What is the company's ENPV?

• A) $13,071
• B) $13,708
• C) $14,443
• D) $14,879
• E) $15,353