Compute the cv

Assignment Help Finance Basics
Reference no: EM13291649

The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is considerable risk involved:

Probability NPV
0.05 -$700,000
0.2 -$250,000
0.5 $120,000
0.2 $200,000
0.05 $300,000

a.) What are the project's expected NPV and standard deviation of NPV?
b.) Compute the CV?
c.) Should the base case analysis use the most likely NPV or expected NPV? Explain your answer.

Reference no: EM13291649

Questions Cloud

What is the amount of the electrical force on point charge : A capacitor has a surface charge density of 5 micro-coulombs/m2. What is the amount of the electrical force on the point charge
Beasts of the southern wild : Hushpuppy in BEASTS OF THE SOUTHERN WILD becomes more than a survivor. In her voice over narration she is very wise. Describe how in her acts and thoughts this wisdom about people, society, memory, love and nature is expressed. Minimum of 300 words.
What is the final velocity of the body : A 5.000 kg mass starts from rest and slides down on an inclined plane that is 5 degrees above the horizontal. If the body starts from rest and takes 1.25 s to travel a distance along the inclined plane, what is the final velocity of the body
Relationship and the power of community : OCTOBER SKY confronts father with son, John versus Homer. Both represent different ways at looking at the world and each thinks he is justified. Trace this conflict between them and explain how these differences touch on variations on the American Dr..
Compute the cv : The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is considerable risk involved.
What is the voltage between the ends of the copper rod : Two cylindrical rods, one copper and the other iron, are identical in lengths and cross-sectional areas. What is the voltage between the ends of the copper rod
Discuss the pros and cons of gas finder apps : Discuss the pros and cons of gas finder apps from either the consumer's viewpoint or the gas retailer's viewpoint.  Do you think they have any impact on gas prices?
Find the voltage across given capacitor : Suppose two parallel-plate capacitors have the same charge q, but the area of capacitor 1 is A and the area of capacitor 2 is 2A. what is the voltage across capacitor 2?
What is the holding period return for the year : The value of the portfolio on December 31 of the same year was $113,201. At the end of June, Stacy withdrew $5,000 from the portfolio. What is the holding period return for the year?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the growth rate expected for emery company

Emery Company just paid a dividend of $2.25 per share. The company's stock is currently selling for $60 per share, and the required rate of return on Emery Company stock is 16%. What is the growth rate expected for Emery Company dividends assuming..

  What was the firm degree of accounting operating leverage

If the firm's EBITDA was $1,000 last year while its depreciation and amortization expense was $50 in the same year, then what was the firm's degree of accounting operating leverage?

  Computing future value of annuity over time

If you can earn eight percent per year on your retirement account, how much will you have to save each year if you want to retire in 20 years with $1 million?

  What should be the price of abcs bonds

You also know that bonds with similar risk are selling at YTM of 15%. What should be the price of ABCs' bonds?

  Complete a trend analysis

Using 2012 as the base year, complete a trend analysis. Round each precent to the nearest whole percent.

  The amount of the dividends it pays out after financing

Dennis Corp has plans calling for a capital budget of $60 million. Its optimal capital structure is 60 percent equity and 40 percent debt. Its earnings before interest and taxes (EBIT) were $98 million for the year. The firm has $200 million in asset..

  Evaluate the annual depreciation allowances

Find what initial cash outlay is required for the new machine? Round your answer to the nearest dollar and evaluate the annual depreciation allowances for both machines and compute the change in the annual depreciation expense

  Determine sales volume in units

Excalibur company has created a model to predict sales revenues for its line of beach towels and swimwear based on long-range weather forecasts.

  Insurance company as a financial intermediary

he savings rate domestically has raised, probably due to uncertainty about the future. All else equal, how should this affect market interest values?

  Calculate the before-tax cost of the sony bond

Calculate the after-tax cost of the Sony bond given David's tax bracket.

  S net value if the portfolio is hedged with the index.

Show the effect on the portfolio in terms of its net value if the portfolio is hedged with the index.

  What will year 2 free cash flow for the project be

NWC requirements at the beginning of each yearis approximately 20% of the projected sales during the coming year. Thetax rate is 40% and the required returnon the project is 13%.

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