25. Consider the alternative investment proposals 1 and 2. The cash flow estimates for these projects are:

The initial cost of each of the proposals is Rs 2,00,000, while the cash flow estimates are valid for a period of six years in respect of each of them. Determine expected NPV for each of the projects and its standard deviation. Use a discount rate of 10 per cent.

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Project 1 Project 2 Annual cash flow (Rs) Prob. Annual cash flow (Rs) Prob. 20,000 0.10 30,000 0.20 30,000 0.20 50,000 0.30 60,000 0.40 70,000 0.40 90,000 0.20 90,000 0.10 1,00,000 0.10