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The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV
The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is considerable risk involved:
Probability | NPV |
5% | -$700,000 |
20% | -$250,000 |
50% | $120,000 |
20% | $200,000 |
5% | $300,000 |
What are the project's expected NPV and standard deviation of NPV?
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