File Preview2. The cash flows from a contemplated project are assumed to have a Beta distribution withfollowing estimated values:EOY0Pessimistic, YpS-14,0001025,00038,000Most likely$-12,0002,0008,00012,000Optimistic, Yo$-10,0004,00011,00016,000(a) Calculate the means and standard deviations of the cash flow for each year.(b) Assume MARR-15%, find the the mean and standard deviation of the net presentvalue. (Assume the cash flows are completely independent.)

(a) Means and standard deviations of the cash flow for each year:Year 0:Mean = (-14,000 + 4*0 +…

Answered: File Preview 2. The cash flows from a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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