Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Along with the sensitivity analysis, Danielle is including a scenario analysis for the project in her report, giving the probability of the project generating a
Along with the sensitivity analysis, Danielle is including a 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 Data for z Probability (Pj) 0.35 0.30 0.35 0.03 0.06 Outcome Pessimistic Most likely Optimistic NPVj -$5.62 million $7.94 million $16.45 million 0.4 0.6 0.8 1.0 0.09 0.3336 0.3228 0.3121 0.2643 0.2546 0.2451 0.1867 0.1515 0.1446 0.1379 0.2033 0.1949 Complete the missing information in Danielle's report: The expected net present value of the project is $6.17 million million. Standard deviation of the net present value (the NPV of the project is likely to vary by) Assuming that probability distribution is normal, the value of z is Thus, the project has a chance to generate an NPV of less than $0
Step 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