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.

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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 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. 

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