Question: Part V: Scenario Analysis Use this information to answer questions 31- 34. Suppose BearKat Enterprises management team decides to do a scenario analysis. They want

Part V: Scenario Analysis

Use this information to answer questions 31- 34.

Suppose BearKat Enterprises management team decides to do a scenario analysis. They want you to calculate the expected NPV, standard deviation, and coefficient of variation for a new project. (These are not the NPVs that you calculated earlier). They give you the following data:

Best case has a 15% probability and has an NPV of $28.95 M.
Base case has a 55% probability and has an NPV of $17.55M.
Worst case has a 30% probability and has an NPV of -$35.77M.

QUESTION 31

Use the information given for part V; Scenario analysis.

What is the expected NPV of this project?

	A.	$3.26M
	B.	$4.87M
	C.	$5.53M
	D.	$20.76M

QUESTION 32

Use the information given for part V; Scenario analysis.

What is the standard deviation of the NPVs of this project?

	A.	$18.795M
	B.	$22.317M
	C.	$25.85M
	D.	$38.154M

QUESTION 33

Use the information given for part V; Scenario analysis.

What is the coefficient of variation of the NPVs of this project?

	A.	2.25
	B.	3.22
	C.	4.86
	D.	7.92

QUESTION 34

A project that has a coefficient of variation of NPVs of 6.7 is less risky than a project that has a coefficient of variation of NPVs of 2.1.

True

False

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