Answered step by step
Verified Expert Solution
Question
1 Approved Answer
($6.17M,$0.93M,$6.85M,$2.06M) (10.68,9.3,10.17,9.33) (-0.83,-0.65,1.03,-0.66) (25.46%,26.43%,31.21%,14.46%) Along with the sensitivity analysis, Tanya is including scenario analysis for the project in her report, giving the probability of the
($6.17M,$0.93M,$6.85M,$2.06M)
(10.68,9.3,10.17,9.33)
(-0.83,-0.65,1.03,-0.66)
(25.46%,26.43%,31.21%,14.46%)
Along with the sensitivity analysis, Tanya is including scenario analysis for the project in her report, giving the probability of the project generating a negative NPV. Her report includes the following information about the scenario analysis: Data Collected Probability (P) Outcome NPV 0.35 Pessimistic -$5.62 million Most likely 0.30 $7.94 million 0.35 Optimistic $16.45 million Probability Data for z 0.03 0.06 0.09 Z 1.0 0.1515 0.1446 0.1379 0.1949 -0.8 0.2033 0.1867 0.2643 -0.6 0.2546 0.2451 -0.4 0.3336 0.3228 0.3121 Complete the missing information in Tanya's report: (Note: Round your answers to two decimal places.) The expected net present value of the project is Standard deviation of the net present value (the NP of the project is likely to vary by) million Assuming that probability distribution is normal, the value of z is Thus, the project has a chance to generate an NPV of less than $0Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started