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Huang Industries is considering a proposed project whose estimate NPV is $12 Million. This estimate assues that economic conditions will be average. However, the CFO
Huang Industries is considering a proposed project whose estimate NPV is $12 Million. This estimate assues 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:
Econmic Scenario Probability of Outcome NPV
Recession .05 ($70 Mil.)
Below Average .20 (25 Mil.)
Average .50 12 Mil.
Above Average .20 20 Mil.
Boom .05 30 Mil.
Calculate the project's expected NPV, Standard deveation, and coefficient of variation.
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