110. An initial investment of $1 million in a venture capital project is expected to pay $10 million at
the end of 5 years if it is successful. The probabilities of failure for the project are provided in
the table below:
Year: 1 2 3 4 5
Failure Probability: 0.30 0.25 0.20 0.20 0.20
If the cost of capital for the project is 18%, the project’s expected NPV is closest to:
A. -$731,200.
B. $174,950.
C. $906,150.
Bạn đang xem 110. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM AFTERNOON 2011
