The required rate of return is 12 and the cash flows from a


The required rate of return is 12% and the cash flows from a potential project under three scenarios are below:

Probability of Scenario
Year 0.1 0.6 0.3
0 ($120,000) ($120,000) ($120,000)
1 36,000 41,000 48,000
2 36,000 41,000 48,000
3 36,000 41,000 48,000
4 36,000 41,000 48,000

a. Find the expected NPV
b. the Standard Deviation
c. the coefficient of varation
d. is this a good project to invest in?

 

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Finance Basics: The required rate of return is 12 and the cash flows from a
Reference No:- TGS0621483

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