You have estimated the irr for a new project with the


Question: You have estimated the IRR for a new project with the following probabilities: Possible IRR Value Probability 4% 5% 7% 15% 10% 15% 11% 50% 14% 15%

a. Calculate the expected IRR of the project.

b. Calculate the standard deviation of the project.

c. Calculate the coefficient of variation of the new project.

d. Calculate the expected IRR of the new portfolio with the new project. The current portfolio has an expected IRR of 9% and a standard deviation of 3% and will represent 60% of the total portfolio.

e. Would you advise accepting this new project? Justify your answer.

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Finance Basics: You have estimated the irr for a new project with the
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