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Business, 05.03.2021 22:40 shadenShaden4528

Industrialization Enterprise is considering a three-year project that will require an initial investment of $44,000. If market demand is strong, Industrialization Enterprise thinks that the project will generate cash flows of $28,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $1,500 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak. If the company uses a project cost of capital of 12%, what will be the expected net present value (NPV) of this project? a. $7,172
b. $6,813
c. $8,606
d. $6,096

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