The scientists at Vegetron have come up with an electric mop and the firm is ready to go ahead with pilot production and 80 % chance that the pilot production and market tests will be successful . marketing . The is only If pilot production and test marketing are successful , then Vegetron will build a big plant at a cost of $ 400,000 at t 1 . The plant will start generating after - tax cash flows at time 2. However , the cash flows will depend on demand conditions . If the demand is high , then it will produce after - tax cash flow of 400,000 per year for 2 years ( at and ) . If the demand is low , it will produce after - tax cash flow of 300,000 for 2 years ( at and ) . The probability that the demand will be high is 60 % and that it will be low is 40 % . If pilot production and test marketing are not successful , then Vegetron will build a small plant at a cost of $ 200,000 at . The plant will start generating after - tax cash flows at t = 2. However , the cash flows will depend on demand conditions . If the demand is high , then it will produce after - tax cash flow of $ 200,000 per year for 2 years ( at t 2 and ) . If the demand is low , it will produce after - tax cash flow of $ 50,000 for 2 years ( at t 2 and ) . The probability that the demand will be high is 60 % and that it will be low is 40 % . The appropriate discount rate is 10 percent for this project . Use the above information to answer questions 35-36 . 29. What is the project's expected NPV ? a . $ 69,120 b . $ 70,322 $ 71,300 d . $ 71,635 71,725 30. What is the risk ( standard deviation of NPV ) associated with the project ? a . $ 98,129 $ 101,735 $ 106,235 d $ 107,925 . $ 108,808 831.500