The managers of Meth 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:

ProbabilityNPV

0.05($700,000)

0.20(250,000)

0.50120,000

0.20200,000

0.05300,000

Need the project's expected NPV and standard deviation of NPV.

Should the base case analysis use the most likely NPV or expected NPV?Explain your answer.