Question 5.11: Ukon Ltd is considering two competing projects. Details of e...

Financial Management for Decision Makers

Ukon Ltd is considering two competing projects. Details of each project are as follows:
● Project A has a 0.8 probability of producing a negative NPV of £500,000, a 0.1 prob-ability of producing a positive NPV of £1.0 million, and a 0.1 probability of producing a positive NPV of £5.5 million.
● Project B has a 0.2 probability of producing a positive NPV of £125,000, a 0.3 prob-ability of producing a positive NPV of £250,000, and a 0.5 probability of producing a positive NPV of £300,000.
What is the expected net present value (ENPV) of each project?

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