Calculate the project expected NPV-standard deviation

Assignment Help Financial Management
Reference no: EM132063996

SCENARIO ANALYSIS Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 ($68 million) Below average 0.20 (18 million) Average 0.50 12 million Above average 0.20 18 million Boom 0.05 28 million Calculate the project's expected NPV, standard deviation, and coefficient of variation. Round your answers to two decimal places. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13. E(NPV) = $ ________ million ?NPV = $ ________ million CV = ________.

Reference no: EM132063996

Questions Cloud

What was Wallace total long-term debt : What was Wallace's total long-term debt in 2016? How much new long-term debt financing will be needed in 2017?
True concerning the free cash flow hypothesis : Which of the following statements is true concerning the free cash flow hypothesis?
What is self-supporting growth rate : How large a sales increase can the company achieve without having to raise funds externally—that is, what is its self-supporting growth rate?
Replacement of eight-year-old riveting machine : St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings
Calculate the project expected NPV-standard deviation : Calculate the project's expected NPV, standard deviation, and coefficient of variation.
Expected rate at which the firm should grow equity : What is the expected rate at which the firm should grow equity? Compute the standard deviation of the rate of growth found above.
Prepare the historical average and standard deviation : Prepare the Historical Average and Standard Deviation for each stock.
Using the current yield as return measure : One of the problems of using the current yield as a return measure is
Problems of using the current yield as return measure : one of the problems of using the current yield as a return measure is:

Reviews

Write a Review

Financial Management Questions & Answers

  What is the expected price of this stock

The company will pay a Dividend at the end of year 1 (D1) equal to 2.15. What is the expected price of this stock?

  How much total interest did abc pay over the life of loan

Assuming ABC made the payments as agreed, how much total interest did ABC pay over the life of the loan?

  Lease the equipment or borrow the money

Penn Medical Center, a for-profit hospital, is considering the purchase of a new 64-slice CT scanner. The cost of the new scanner is $4 million and will be depreciated over 10 years on a straight line basis to $0 savage value. The tax rate is 40%. Th..

  The repricing gap model focuses on changes

The "repricing gap" model focuses on changes in the ____________ of a bank

  Source of capital and weighted average cost of capital

Calculate the weighted cost of each source of capital and the weighted average cost of capital.

  Proposed acquisition of new special-purpose truck

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000.

  Compute the diluted value per share

Mr. and Mrs. Anderson own two shares of Magic Tricks Corporation's common stock. Compute the diluted value (ex-rights) per share.

  Assume that due to rapid rate of technological depreciation

Suppose your friend, Pat, approaches you with a plan to get in on the solar panel leasing business. Pat has identified an opportunity to acquire panels sufficient to power 25 homes. Assume that due to the rapid rate of technological depreciation, the..

  Considering a project with conventional cash flows

You are considering a project with conventional cash flows, an IRR of 11.63 percent, a PI of 1.04, an NPV of $987, and a payback period of 2.98 years. Which one of the following statements is correct given this information?

  What will the shares be worth in 5 years

What would be the actual price of the bond be under each interest rate change in part (b) using the traditional present value bond pricing techniques?

  Difference between current liabilities and notes payable

whereas net operating working capital is equal to current assets minus the difference between current liabilities and notes payable.

  Integer linear programming model to assist park management

Formulate and solve an integer linear programming model to assist the park’s management to plan and schedule the number of new employees it hires each week in order to minimize the total number of new employees it must hire during the summer. It may ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd