For an investment with the cash flows below, would you invest? Your MARR is 12% and each flow is probabilistically independent. -$14,000YearExpected Value of Cash FlowStandard Deviation of Cash Flow0 -$14,00001$6000$8002$4000$4003$4000$4004$8000$1000 Solution Minimum value is the minimum value of cash flow that can be possible from operation= Expected value-Sd Maximum value= Expected value+Sd IRR is internal rate of return from series of cash flow when NPV is equal to zero for summation of all period of discounted cash flow. As minimum IRR is 14%, so you will accept the project.YearExpected Value of Cash FlowStandard Deviation of Cash FlowMinimum valueMaximum value0($14,000)0($14,000)($14,000)1$6,000$800$5,200$6,8002$4,000$400$3,600$4,4003$4,0 00$400$3,600$4,4004$8,000$1,000$7,000$9,000IRR14%26%.

1. For an investment with the cash flows below, would you invest? Your MARR is 12% and each
flow is probabilistically independent.
-$14,000YearExpected Value of Cash FlowStandard Deviation of Cash Flow0
-$14,00001$6000$8002$4000$4003$4000$4004$8000$1000
Solution
Minimum value is the minimum value of cash flow that can be possible from operation=
Expected value-Sd
Maximum value= Expected value+Sd
IRR is internal rate of return from series of cash flow when NPV is equal to zero for summation
of all period of discounted cash flow. As minimum IRR is 14%, so you will accept the
project.YearExpected Value of Cash FlowStandard Deviation of Cash FlowMinimum
valueMaximum
value0($14,000)0($14,000)($14,000)1$6,000$800$5,200$6,8002$4,000$400$3,600$4,4003$4,0
00$400$3,600$4,4004$8,000$1,000$7,000$9,000IRR14%26%