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Calculate expected npv and standard deviation

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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 (25 million) Average 0.50 12 million above average 0.20 20 million boom 0.05 30 million Calculate expected NPV and standard deviation?

Reference no: EM132611549

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