eBook Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic ScenarioProbability of Outcome Recession 0.05 0.20 0.50 0.20 0.05 NPV ($74 million) (20 million) 12 million 14 million 38 million Calculate the project's expected NPV, standard deviation, and coefficient of variation. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answers to two decimal places. Below average Average Above average Boom E(NPV): Only: CV: million million
eBook Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic ScenarioProbability of Outcome Recession 0.05 0.20 0.50 0.20 0.05 NPV ($74 million) (20 million) 12 million 14 million 38 million Calculate the project's expected NPV, standard deviation, and coefficient of variation. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answers to two decimal places. Below average Average Above average Boom E(NPV): Only: CV: million million
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Subject: acounting
![eBook
Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However,
the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results:
NPV
($74 million)
(20 million)
12 million.
14 million.
0.05
38 million
Calculate the project's expected NPV, standard deviation, and coefficient of variation. Enter your answers for the project's expected NPV and standard deviation in
millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answers to two decimal places.
Economic ScenarioProbability of Outcome
Recession
0.05
Below average
Average
Above average
Boom
E(NPV):
ONY
CV:
million
million
0.20
0.50
0,20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F472621be-5969-4a54-b52e-f83201e6e65c%2F9c77ed4a-46bc-4aeb-85b5-e6f74bb137e5%2Fhldybd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:eBook
Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However,
the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results:
NPV
($74 million)
(20 million)
12 million.
14 million.
0.05
38 million
Calculate the project's expected NPV, standard deviation, and coefficient of variation. Enter your answers for the project's expected NPV and standard deviation in
millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answers to two decimal places.
Economic ScenarioProbability of Outcome
Recession
0.05
Below average
Average
Above average
Boom
E(NPV):
ONY
CV:
million
million
0.20
0.50
0,20
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