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Firm F is considering a proposed project whose estimated NPV is $143 million. This estimate assumes that economic conditions will be average. However, the CFO
Firm F is considering a proposed project whose estimated NPV is $143 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Scenario Probability NPV Recession 0.05 -980m Poor 0.20 -232m Average 0.50 +143m N Good 0.20 +357m Boom 0.05 +524m What is the coefficient of variation (StDev/Avg)? 0 4.72 0 4.51 04.16 0 4.35
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