A project with an initial outlay of £1m has a 0.2 probability of producing a return of £800,000 in Year 1 and a 0.8 probability of delivering a return of £500,000 in Year 1. If the £800,000 result occurs then the second year could return either £700,000 (probability of 0.5) or £300,000 (probability of 0.5). If the £500,000 result for Year 1 occurs then either £600,000 (probability 0.7) or £400,000 (probability 0.3) could be received in the second year. All cash flows occur on anniversary dates. The discount rate is 12 per cent.
Calculate the expected return and standard deviation.