Philippine Airlines (PAL) plans to offer several new electronic services on flights between Manila and selected Asian destinations. The marketing director estimates that for a typical 24-hour period there is a 55% chance of having a net cash flow of P40,000 and a 25% chance of P95,000. He also estimates there is a small 5% chance of no cash flow and a 15% chance of a loss of P16,000, which is the estimated extra personnel and utility costs to offer the services. Determine the expected net cash flow.

Philippine Airlines (PAL) plans to offer several new electronic services on flights between Manila and selected Asian destinations. The marketing director estimates that for a typical 24-hour period there is a 55% chance of having a net cash flow of P40,000 and a 25% chance of P95,000. He also estimates there is a small 5% chance of no cash flow and a 15% chance of a loss of P16,000, which is the estimated extra personnel and utility costs to offer the services. Determine the expected net cash flow.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 10P

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