JRossSter

ans is b

NPV if poject is success:
-1 mn + (5/1.1^4) = 2,412,882

(Homie, you are missing '-1' mn here. We should consider outflow of 1 mn. Another way to look at it is that if you ignore discounting calculation , then total NPV if project succeed is 5-1= 4 mn and not 5 mn. hope it helps)


NPV is project fails :
- 1 Mn

Total NPV= (2412882*52.02%)- (479800*1) = 775,381 (appx ans is b)