What are the project expected npv

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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

-$34 million

Below average

0.20

-20 million    

Average

0.50

12 million    

Above average

0.20

16 million    

Boom

0.05

32 million    

What are the project's expected NPV, standard deviation, and coefficient of variation? Enter your answers for the NPV and standard deviation in millions. For example, an answer of $1.24 million should be entered as 1.24, not 1,240,000. Do not round intermediate calculations. Round your answers to two decimal places.

E(NPV)

$   million

σNPV

$   million

CVNPV

 

 

Reference no: EM133072673

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