The expected net present values, Financial Accounting

A company is considering investing some independent proposals, The proposals with their expected net present values and standard deviations are given in the following table.

                                                                                                                        A             B             C           

Expected Net Present Value (in millions)                                                                $4.5      $2.4       $3.2

Standard Deviation (in millions)                                                                           1.4          0.9          1.2

The projects have the following correlations:

569_33.png

a)      Calculate the Expected Net Present Values of all the combinations, A+B, A+C, B+C, A+B+C

b)      Calculate the co-variance between A and B, A and C, B and C.

c)       Calculate the Standard Deviations of all the combinations, A+B, A+C, B+C, A+B+C

d)      Calculate the probability of negative Net Present Value of all the combinations, A+B, A+C, B+C, A+B+C

 

Posted Date: 3/15/2013 4:06:08 AM | Location : United States







Related Discussions:- The expected net present values, Assignment Help, Ask Question on The expected net present values, Get Answer, Expert's Help, The expected net present values Discussions

Write discussion on The expected net present values
Your posts are moderated
Related Questions
The Garraty Company has two bond issues outstanding.Both bonds pay $100 yearly interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year.

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 The beta coefficient

Q. Define Risk-adjusted discount rates? One technique in this heading is the assignment of investment projects to one of a set of risk classes all of which has a different disc

Discuss the applicability of the operating cycle in poultry (consider broilers)

Q. How does FCA diverse from what cities already do? Numerous cities at present employ budget-based, or cash-flow, accounting-they report their present costs and figure their e

Q. Explain briefly the role of computers in accounting? Computers can be used as accounting machines and perform all the functions which accounting machines perform. Some of th

What are the effects on current income and on future income, if a firm incorrectly capitalizes an expenditure that it should have expensed?   State your answer for both current inc

Scottsdale Fine Piano%u2019s purchases pianos from a well-known manufacturer and sells them through their retail store. The Baby Grand Pianos sell, on average, for $2,500 each. The

A quick glance at the trend in the Operating and Net Profit Margin figure indicates an improvement in the margins over the 2 year period. As is evident from the graph above HAIL du

Profit is not cash flow: Adequate cash is essential to keep business running. Inadequate cash increases the risk of not being able to meet current obligations as and when the