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You have completed a DCF analysis for a specific company and have calclulated its NPV to be a positive $675,000. However, this company is in
You have completed a DCF analysis for a specific company and have calclulated its NPV to be a positive $675,000. However, this company is in a highly volatile industry and you are concerned that there may be other viable results depending on the existing economic climate. You decide to purchase some economic research data where the future economy can be segmented into 4 categories. You have also been supplied with the corresponding probability of occurances and the likely NPV to exist in each of the 4 economic segments. The following Table presents the critical data. Based on this information, create a Probability Distribution Schedule and determine the Expected Average NPV. Expected Average NPV =$468,750 Expected Average NPV =$545,000 Expected Average NPV =$455,000 Expected Average NPV =($545,000)
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