39- A proposed project has the following cash flow estimates: End of Year Mean Net Cash Flow Standard Deviation of Cash Flow 0 -$32,000 $1,000 1 $4,000 $2,000 2 $8,000 $3,000 3 $12,000 $5,000 4 $12,000 $6,000 5 $12,000 $7,000 Assuming independent cash flows, a normally distributed net present value, and a minimum attractive rate of return of 18 percent, determine the following:
a) The mean and standard deviation of net present value. b) The probability that the net present value is positive. c) The probability that the net present value is greater than $5,000.
39- A proposed project has the following cash flow estimates: End of Year Mean Net Cash Flow Standard Deviation of Cash Flow 0 -$32,000 $1,000 1 $4,000 $2,000 2 $8,000 $3,000 3 $12,000 $5,000 4 $12,000 $6,000 5 $12,000 $7,000 Assuming independent cash flows, a normally distributed net present value, and a minimum attractive rate of return of 18 percent, determine the following: a) The mean and standard deviation of net present value. b) The probability that the net present value is positive. c) The probability that the net present value is greater than $5,000.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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39- A proposed project has the following cash flow estimates:
End of Year |
Mean Net Cash Flow |
Standard Deviation of Cash Flow |
0 |
-$32,000 |
$1,000 |
1 |
$4,000 |
$2,000 |
2 |
$8,000 |
$3,000 |
3 |
$12,000 |
$5,000 |
4 |
$12,000 |
$6,000 |
5 |
$12,000 |
$7,000 |
Assuming independent cash flows, a
a) The mean and standard deviation of net present value.
b) The
c) The probability that the net present value is greater than $5,000.
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