Reading Inc. is contemplating a project represented by the following decision tree. ($000).
Reading is a small firm that is likely to be ruined by a project that loses more than $1.0 million. The firm's cost of capital is 14%. Calculate the project's expected NPV and make a recommendation regarding acceptance.

Question

Reading Inc. is contemplating a project represented by the following decision tree. ($000). 
  Reading is a small firm that is likely to be ruined by a project that loses more than $1.0 million. The firm's cost of capital is 14%. Calculate the project's expected NPV and make a recommendation regarding acceptance.

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The Answer of Reading Inc. is contemplating a project represented by the following decision tree. ($000). 
  Reading is a small firm that is likely to be ruined by a project that loses more than $1.0 million. The firm's cost of capital is 14%. Calculate the project's expected NPV and make a recommendation regarding acceptance.