Question: 2. a. Net present value = $16,000 + $20,000 + $10,000 = $46,000 Standard deviation = [(8,000)2 + (2)(.9)(8,000)(7,000) + (2)(.8)(8,000)(4,000) + (7,000)2 + (2)(.84)(7,000)(4,000)+
2.
a. Net present value = $16,000 + $20,000 + $10,000 = $46,000 Standard deviation = [(8,000)2 + (2)(.9)(8,000)(7,000)
+ (2)(.8)(8,000)(4,000) + (7,000)2
+ (2)(.84)(7,000)(4,000)+ (4,000)2]1/2
= [328,040,000]1'2 = $18,112
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