Different techniques for analyzing project risk require different input variables and assumptions.

The procedure in which one of the elements (or variables) affecting a project's expected value is changed to study its effect on the expected value is called analysis.

Paloma is a risk analyst. She is conducting a sensitivity analysis to evaluate the riskiness of a new project that her company is considering investing in. Her risk analysis report includes the sensitivity curve shown on the graph.

Outcome NPVj Probability(Pj)

Pessimistic -$3.50 million 0.20

Most likely $5.62 million 0.45

Optimistic $11.34 million 0.35

This curve implies that the project is very sensitive to changes in units sold. The project's NPV is likely to become negative if the number of units sold decreases by10% or 5%?.

Along with the sensitivity analysis, Paloma is including a scenario analysis for the project in her report, giving the probability of the project generating a negative NPV. Her report includes the following information about the scenario analysis:

Outcome NPVj Probability(Pj)

Pessimistic -$3.50 million 0.20

Most likely $5.62 million 0.45

Optimistic $11.34 million 0.35

Complete the missing information in Paloma's report:

The expected net present value of the project is___________million?.

Standard deviation of the net present value (the NPV of the project is likely to vary by) __________?million.