Reference no: EM132943520

Telluride Tours is currently evaluating two mutually exclusive investments. After doing a scenario analysis and applying probabilities to each scenario, it has determined that the investments have the following distributions around the expected NPVs:

Probability:                     NPV Project A:              NPV Project B:
10%                           $-39,780                        $-14,918
20%                             $-9,945                           $2,486
40%                                $19,890                         $19,890
20%                                $49,725                          $37,294
10%                             $79,560                             $54,698

Problem 1: Are you able to find the expected NPV for the above projects? If so, how? Or what other information is needed?

Problem 2: How would you calculate the variance, standard deviation, and coefficient of variation of the NPV of each project?

Problem 3: How would you calculate the probability of a negative NPV of each project?