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NPV Shao industries is considering a proposed project for its capital budget. The company estimates the project's NPV is 512 million. This estimate assumes that
NPV Shao industries is considering a proposed project for its capital budget. The company estimates the project's NPV is 512 million. This estimate assumes that the economy and market conditions will be average over the next few years. The companys CFO, however, forecasts there is only a 50% chance that the economy will be average Recognizing this uncertainty, she has also performed the following scenario analysis Economc Scenario Probability of Outcome Recession -$70 million Below average 0.20 25 million Average 0.50 18 million Above average 0.20 20 million Boom 0.05 30 million if the standard deviation of NPV is 17.64 million, what is the coefficient of variation of NPV for the project? 2.94 5.89 7.87 9.52 1.67
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