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Should Qualil recommend that the project be purchased

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Reference no: EM132698619

Problem - Qualil evaluated a project using scenario analysis. His results indicate that the project normally will generate a net present value (NPV) equal to $19,800, which will occur 70 percent of the time. But, he also discovered that 10 percent of the time the NPV will be 2$20,100, and 20 percent of the time the NPV will be $31,500. The firm's policy is not to invest in projects that have coefficients of variation greater than 0.8. Should Qualil recommend that the project be purchased?

Reference no: EM132698619

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