Question

Click here to read the eBook: Measuring Stand-Alone Risk SCENARIO ANALYSIS Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average. However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results Economic Scenario Probability of Outcome NPV Recession Below average Average Above average Boom Calculate the project's expected NPV, standard deviation, and coefficient of variation. Round your answers to two decimal places. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13 0.05 0.20 0.50 0.20 0.05 ($40 million) (24 million) 12 million 18 million 40 million million E(NPV)$ million CV -

Answer 1

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Home ert Page Layout Formulas Data Review V Add-Ins 義Cut aCopy AutoSum Calibri 11 Arap Text General Fill В า 프. m. a-Δ. Ξミ 迣锂函Merge & Center. $, % , 弼皛Conditional Format. Cell. Insert Delete Format Paste Sort &Find & Format Painter Formatting as Table Styles ClearFilter Select Clipboard CP357 CJ Font Alignment Styles Cells dting CK CL CM CN CO CP 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 a 357 b 358 C 359 360 state of prob EXPECTED NPV VARIANCE economy NPV PROB (NPV -E(NPV))A2 RECESSION BELOW AVG AVG ABOVE AVG BOOM 0.05 -40 24 12 18 40 2.00 -4.80 6.00 3.60 2.00 4.80 100.352000 165.888000 25.920000 34.848000 61.952000 0.5 0.05 E(NPV) V(NPV) SD (NPV) SQRT(V(NPV))- 388.960000 19.72 E(NPV) STANDARD DEVIATION- COEFFICIENT OF VARIATION 4.80 19.72 4.11 [19.72/4.80] DEAR ! Sheet2 | COV i TIME SERIES corr REGRESSION range CAMERA MATRIXINTERVAL, NORMAL HYPOTHESIS GP MATHS 05:16 07-04-2019