Question
Suppose your CFO wants you to do a scenario analysis. She asks you to use the following probabilities and NPV values. There is a 35.0%
Suppose your CFO wants you to do a scenario analysis. She asks you to use the following probabilities and NPV values. There is a 35.0% probability of the worst-case scenario occurring and if it does, the project will have an NPV of -$2,409. There is 45.0% probability of the base-case scenario taking place, in which case the project will earn an NPV of $24,810. Finally, there is 20.0% chance of the best-case scenario happening, in which case the NPV of the project will be $79,533. Calculate the projects expected NPV.
$6,968 | ||
$9,079 | ||
$12,585 | ||
$3,556 | ||
$26,228 |
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