NPV of Venture Capital Project separate, required, expected, investment

EastCoastJ

The CFA book has 2 separate ways of calculating the NPV of a venture capital project (one in Example 5 on p. 217 and one in Practice Problem #9 on p. 247). I was wondering when to use each method.

For example, you have a project that requires a $1mm investment, 20% failure, 80% success (which will pay $25mm after 10 years), 15% cost of equity...

One method is to use the PV of the expected payoff minus the required initial investment (this method is used in PP#9):
20%*0 + 80%*(25mm/1.15^10) - 1mm

The other method is to use the weighted NPVs of each scenario (this method is used in Example 5):
20%*-1mm + 80%*(-1mm + 25mm/1.15^10)

Which one is correct?? Is this a mistake in the book?

Thanks so much.