1a cash flow of 250000 may be received by lydia nickels inc, Ask an Expert

Accounting

1.A cash flow of $250,000 may be received by Lydia Nickels, Inc. in one year, two years, or three years, with probabilities of 25%, 60%, and 35%, respectively. The rate of interest on default risk-free investments is 6%. What is the expected present value of Lydia Nickels' cash flow (in whole dollars)?

a. ?$132,380
b. ?$266,994
c. ?$265,930
d. ?$133,550

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91749539

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