登录之后可查看解析

This is the probability that the annual cash flow will be $55,000 or below. An annual cash flow of $55,000 or below will not result in a positive NPV for the project.
This is the probability that the annual cash flow will be $55,000. However, an annual cash flow of $55,000 will not result in a positive NPV for the project.
This is the probability that the annual cash flow will be $60,000. An annual cash flow of $60,000 will result in a positive NPV. However, other annual cash flows will also result in positive NPVs, and the answer to the question should be the total of all annual cash flows that will result in positive NPVs.
This question involves six different possible 5-year annuities – the six probabilities. We need to find which of them will result in positive NPVs and then sum the probabilities of those cash flows to find the total probability of having a positive NPV. It is not necessary to calculate an NPV for each possible cash flow in order to do that, however. A positive NPV would be a present value of the positive cash flows that is greater than the initial expenditure of $200,000. We need to find the lowest annual cash flow that results in a positive NPV. That annual cash flow and any cash flow above it will result in a positive NPV, and the total of those cash flow probabilities will give us the total probability of the NPV being positive. To find the annual cash flow that results in a positive NPV, we can divide the $200,000 original investment by the factor for a 5-year annuity at a discount rate of 14%, which is 3.433. The result is $58,258. Therefore, any annual after-tax cash flow that is greater than $58,258 will produce a positive net present value. Annual after-tax cash flows of $60,000, $65,000 and $70,000 all are above $58,258. Therefore, the probability of achieving a positive net present value is the sum of the probabilities of these three annual after-tax cash flows: .20 + .10 + .10, which equals .40 or 40%.