At Stage 2 of the decision tree it shows that if a project is successful, the payoff will be $53,000 with a 2/3 chance of occurrence. There is also…

At Stage 2 of the decision tree it shows that if a project is successful, the payoff will be $53,000 with

a 2/3 chance of occurrence. There is also the 1/3 chance of a $24,000 payoff. The cost of getting to

Stage 2 (1 year out) is $24,000. The cost of capital is 15 percent. What is the NPV of the project at

Stage 1?

A. $349.16

B. $231.88

C. $108.17

D. $133.33

E. $147.59

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