The required rate of return is 12% and the cash flows from a potential project under three scenarios are below:
Probability of Scenario
Year 0.1 0.6 0.3
0 ($120,000) ($120,000) ($120,000)
1 36,000 41,000 48,000
2 36,000 41,000 48,000
3 36,000 41,000 48,000
4 36,000 41,000 48,000
a. Find the expected NPV
b. the Standard Deviation
c. the coefficient of varation
d. is this a good project to invest in?