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Expected cash flow of the company's project in 3 years, with an initial investment of $10,000 in illustrated below: The company's required rate of return
Expected cash flow of the company's project in 3 years, with an initial investment of $10,000 in illustrated below: The company's required rate of return for this investment is 8%: What is the mean net present value of the project? What is the standard deviation about the mean? If the total distribution is approximately normal and assumed continuous, what is the probability of the net present value being above $1,000? What is the probability that the net present value will be greater than zero? Assuming that there is perfect correlation among the cash flows, what is the standard deviation of the project and net present value? Suppose a firm has a single investment project, 1 and it is considering an additional project, 2. The projects have the following net present values, standard deviations, and correlation coefficients: What is the NPV of the portfolio? What is the standard deviation of the portfolio
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