Shao Industries is considering a proposed project for its capital budget. The company estimates that the project's NPV is $12 million. This estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts that there is only a 50 percent chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis:

What is the project's expected NPV, its standard deviation, and its coefficient of variation?

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Probability of Outcome Economic Scenario NPV 0.05 0.20 ($70 million) (25 million) 12 million Recession Below average Average Above average 0.50 20 million 0.20 0.05 30 million Boom