Question: Scenario Analysis - multi part question. Shao Industries is considering a proposed project for its capital budget. The company estimates the project's NPV is $12
Scenario Analysis - multi part question.
Shao Industries is considering a proposed project for its capital budget. The company estimates the project's NPV is $12 million. This estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis:
| Economic Scenario | Probability of Outcome | NPV |
| Recession | 0.05 | -$70 million |
| Below average | 0.20 | -24 million |
| Average | 0.50 | 12 million |
| Above average | 0.20 | 20 million |
| Boom | 0.05 | 32 million |
What are the project's expected NPV, standard deviation, and coefficient of variation? Enter your answers for the NPV and standard deviation in millions. For example, an answer of $1.24 million should be entered as 1.24, not 1,240,000. Do not round intermediate calculations. Round your answers to two decimal places.
| E(NPV): | $ million |
| NPV: | $ million |
| CVNPV: |
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