What is the expected value of the project

What is the expected value of the project

Business Economics

Ms. Lee Ding is considering whether the following capitol project should be undertaken. Its life is 6 years; it has a 6% salvage value; and her firm uses a 12% MARR.

Initial Cost                      P*                        Annual Net Revenue                          P*

$250,000                         0.4 $ 75,000 0.2

300,000                                                             80,000

350,000                         0.2                              90,000 0.2

400,000                         .05 100,000 0.1

500,000                         .05                            115,000 0.1

*Probability

1. a) What is the probability of it costing $300,000?
2. b) What is the probability of the net revenue being $80,000?
3. c) What is the expected value of the project?
4. d) Should she do it?