Toys For You is considering a project for its capital budget. While the project's NPV is...

 

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Toys For You is considering a project for its capital budget. While the project's NPV is estimated at $650,000, this estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts that there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the below noted scenario analysis. What is the project's expected NPV under such scenario analysis. (answer positive number with no decimal and no comma nor dollar sign) Economic scenario Recession Probability 0.05 NPV - 350,000 Below average 0.15 -75,000 Average 0.50 850,000 Above average 0.25 1,250,000 Boom 0.05 1,500,000 Answer: Toys For You is considering a project for its capital budget. While the project's NPV is estimated at $650,000, this estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts that there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the below noted scenario analysis. What is the project's expected NPV under such scenario analysis. (answer positive number with no decimal and no comma nor dollar sign) Economic scenario Recession Probability 0.05 NPV - 350,000 Below average 0.15 -75,000 Average 0.50 850,000 Above average 0.25 1,250,000 Boom 0.05 1,500,000 Answer:

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