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Shao industries is considering 2 proposed projects for its capital budget. The company estimates the project A's NPV is $20 million and the Project B's

Shao industries is considering 2 proposed projects for its capital budget. The company estimates the project A's NPV is $20 million and the Project B's NPV $ 25 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 40% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis:

Economic Scenario

Probability of outcome

Project A's NPV ($M)

Project B's NPV ($M)

Recession

0.1

-10

-15

Average

0.4

20

25

Above Average

0.4

45

35

Boom

0.1

70

75

a) What is the project As expected NPV, its standard deviation, and its coefficient of variation?

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