Hello! I received this answer and it was very helpful, however I cannot figure out the FORMULA for the variance, and the standard deviation. I realize I cannot attach excel, but I cannot figure out how these answers came about. Can you please clarify the excel formula used for VARIANCE, for STD DEV and for Coefficient? Thnk you!

Expected NPV = 3,000,000

Standard deviation = 24,257,988.37

Coefficient of variation = 8.09

Explanation:

The table below summarises the key results:

Expected NPV = ipiNPVi=(0.05)(70m)+(0.20)(25m)+...+(0.05)(30m)=3,000,000

Standard deviation = pi(NPViE(NPV))2

=0.05(70m3m)2+0.20(25m3m)2...0.05(30m3m)2=588,450,000,000,000=24,257,988.37

Coefficient of variation = ExpectedNPVStandarddeviation=3,000,00024,257,988.37=8.09

• [edit]Download Attachments: Cov.PNG

Expected NPV = 3,000,000

Standard deviation = 24,257,988.37

Coefficient of variation = 8.09

Explanation:

The table below summarises the key results:

Expected NPV = ipiNPVi=(0.05)(70m)+(0.20)(25m)+...+(0.05)(30m)=3,000,000

Standard deviation = pi(NPViE(NPV))2

=0.05(70m3m)2+0.20(25m3m)2...0.05(30m3m)2=588,450,000,000,000=24,257,988.37

Coefficient of variation = ExpectedNPVStandarddeviation=3,000,00024,257,988.37=8.09

• [edit]Download Attachments: Cov.PNG