An investment costs $7,000, after tax considerations, and will generate cash flows of $1,500 a year over its life. The capital investment will last for 7, 8, or 9 years, with probabilities of 0.3, 0.4, and 0.3 respectively. Assume the required rate of return is 10%.
(A) Find the expected NPV of the investment.
(B) Find the standard deviation of the project’s expected NPV.
(C) Find the coefficient of variation for the project.