13-7, with comprehensive answer step-by-step please

SCENARIO ANALYSIS 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 condi- 499 13-7 obtained these results: Probability of Outcome 0.05 Economic Scenario Recession Belcw average Average Above average Boom 0.20 NPV ($70 million) 10.7 (25 million) o.ouxes: 12 million 0.1 1.2 20 million 0.04 > 20 +0.8 30 million 0.00 0.50 0.20 0.05 0.3 Calculate the project's expected NPV, standard deviation, and coefficient of variation. 8 NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%, as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm's marginal domal plus.state tax rate is 40%