Mr  Smith is considering an investment proposal of JMD50,000

Subject:FinancePrice:2.86 Bought11

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Mr  Smith is considering an investment proposal of JMD50,000.00. The return during the life of the investment are as follows: Year 1 Events Cash Flow probability 25,000.00 0.4 20,000.00 0.5 40,000.00 0.1 111 25,000.00 20,000.00 40,000.00 Events Cash Flow probability Cash Flow probability Cash Flow probability 30,000.00 0.2 100,000.00 0.1 25,000.00 ii 20,000.00 0.6 30,000.00 0.8 40,000.00 25,000.00 0.2 40,000.00 0.1) 60,000.00 0.2 0.5 0.3 Using 20% cost of capital, advise the acceptability of the proposal.