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Expected standard deviation for proposed project

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Reference no: EM133060477

Your management team has put together the following projections for a project that your company may be interested in implementing.

Demand

Probability

Annual Cash Flow

High 

20%

$100,000,000.00

Average

60%

$40,000,000.00

Low

20%

$10,000,000.00

Project's cost of capital

 

12%

Life of project

 

3

Required investment

 

$75,000,000.00

Use this information to answer the following question.

Use the decision-tree procedure to project the expected standard deviation for the proposed project, considering an investment timing option to wait one year before implementation. [Round the final answer to the nearest cent]

Reference no: EM133060477

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