A project's base case or most likely NPV is $50,000, and assume its probability of
occurrence is 60%. Assume the best case scenario NPV is 60% higher than the
base case and assume the worst scenario NPV is 30% lower than the base case. Both
the best case scenario and the worst case scenario have a 20% probability of
occurrence. Find the project's coefficient of variation.
Expected NPV=Sum(probability*NPV)=50000*60%+50000*1.6*20%+50000*0.7*20%=53000.00
Standard deviation of NPV=sqrt(Sum(probability*(NPV-Expected NPV)^2))=sqrt(60%*(50000-53000)^2+20%*(50000*1.6-53000)^2+20%*(50000*0.7-53000)^2)=14696.93846
Coefficient of variation=Standard deviation/Expected
NPV=14696.93846/53000=0.27730
A project's base case or most likely NPV is $50,000, and assume its probability of occurrence is 60%. Assume the best ca...
A project's base case or most likely NPV is $50,000, and assume its probability of occurrence is 60%. Assume the best case scenario NPV is 60% higher than the base case and assume the worst scenario NPV is 30% lower than the base case. Both the best case scenario and the worst case scenario have a 20% probability of occurrence. Find the project's coefficient of variation. Enter your answer rounded to two decimal places. For example, if your answer is...
A project's base case or most likely NPV is $50,000, and assume its probability of occurrence is 60%. Assume the best case scenario NPV is 60% higher than the base case and assume the worst scenario NPV is 30% lower than the base case. Both the best case scenario and the worst case scenario have a 20% probability of occurrence. Find the project's coefficient of variation. Enter your answer rounded to two decimal places. For example, if your answer is...
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