Question 16 3 pts Your friend has asked you to evaluate profitability of his plan...
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Question 16 3 pts Your friend has asked you to evaluate profitability of his plan to open a gym. He wants to invest $2 millions today to open the gym and run it for 10 years. The gym monthly membership is $50. He believes that the gym will have 3,000 members in a good month, 2,000 members in an average month, and 1,000 members in a bad month. However, the monthly operational cost of running the gym is $50,000, regardless of how good a month is in terms of membership. The probability of having a good month is 30%, the probability of having an average month is 50%, and the probability of having a bad month is 20%. Assuming no inflation and annual interest rate of 18% for this project, what is the NPV of your friend's gym business? Enter your answer without $ sign
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