Question: 4. 3. NPV distribution, there is considerable risk involved (5 points): Probability NPV 0.05 -$700,000 0.2 -$350,000 0.5 $250,000 0.2 $350,000 0.05 $450,000 a. What
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3. NPV distribution, there is considerable risk involved (5 points): | |||||||||||||||
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| Probability | NPV |
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| 0.05 | -$700,000 |
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| 0.2 | -$350,000 |
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| 0.5 | $250,000 |
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| 0.2 | $350,000 |
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| 0.05 | $450,000 |
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| a. What are the project's expected NPV and standard deviation of NPV? b. Compute CV? | |||||||||||||||
| c. What decision is appropriate for this project using NPV, standard deviation and CV? | |||||||||||||||
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