hi! I have a assigment which I struggle with.
the subject is:
you are a risk averse investor considering an investment that requires an initial outlay of 50000$. you have calculated the present value of the future distribution of gain and losses, their associated probabilities, as well as their equivalent utilities. data is as follow:
Cost discounted gains and losses
$000 (50) 200 100 50 (10) (15)
prob 1.0 0.1 0.3 0.4 0.1 0.1
utili 0.65 1.67 1.00 0.65 (0.75) (1.52)


1.using the concept of expected monetary value (EMV) would you accept the investment based upon its E(NPV)? explain

2. how does your answer compare with a decision using the present value of the cash flows of your expected utilities drawn from figure 2.5(there is a graph.-attached)
3. Do you think mean variance analysis would alter your financial choice?Write down explanation of what it has to offer.


first I have calculated NPV . not sure it is right.$73.692,22. positive NPV so i would accept teh project. (is that even right). not sure about the rest, and the graph seems soooo alien ;/
please help.
http://i225.photobucket.com/albums/dd157/Madu0278/wykres.jpg