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A firm has the NPV of a project based on three possible economic conditions and their probabilities given below. The expected NPV is $35 million.
A firm has the NPV of a project based on three possible economic conditions and their probabilities given below. The expected NPV is $35 million. What is the standard deviation for the project's NPV?
Economic Condition | Probability | NPV ($million) |
Recession | .70 | 22 |
Boom | .20 | 74 |
No Change | .10 | 48 |
A) 22.01
B) 20.96
C) 19.91
D) 22.85
E) 19.49
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