Project expected npv and standard deviation of npv

Assignment Help Finance Basics
Reference no: EM132200029

The managers of Meth Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is considerable risk involved:

Probability NPV

0.05 ($700,000)

0.20 (250,000)

0.50 120,000

0.20 200,000

0.05 300,000

Need the project's expected NPV and standard deviation of NPV.

Should the base case analysis use the most likely NPV or expected NPV? Explain your answer.

Reference no: EM132200029

Questions Cloud

What is the new npv : What is the project's year 0 net cash flow? Year 1? Year 2? Year 3? What is the new NPV?
Write a function that takes as input a natural number : Write a function that takes as input a natural number, n, and that returns the square of its input by adding the first n odd numbers.
What is the terminal cash flow for equipment : Given that the firm's marginal corporate tax rate is 40%, what is the terminal cash flow for this equipment?
Write a function in matlab that takes as input the number : Write a function in Matlab that takes as input the number n and a symmetric tridiagonal matrix given as two vectors: n×1 vector v representing.
Project expected npv and standard deviation of npv : Should the base case analysis use the most likely NPV or expected NPV? Explain your answer.
Political viewpoint and give an outline of the organization : Research and Provide a top to bottom examination for Under Armor in Brazil from political viewpoint and give an outline of the organization
Projection for the firm operating cash flow : The firm has a marginal tax rate of 40%. What is the projection for the firm's operating cash flow for this replacement project?
Write a function that will reverse the order of values : Write a function that will reverse the order of values in a 20-element array of integers sent to it as an argument.
What is the annual inventory holding cost : What is the annual inventory holding cost? What is the total annual cost to manage the inventory? What is ROP?

Reviews

Write a Review

Finance Basics Questions & Answers

  Treasury and corporate bonds

If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds

  Define the principles of evolution

Pretend you are hiking down through the Grand Canyon or another area rich in fossils. How do the fossils you see provide evidence for Darwin's idea of "descent with modification", or evolutionary theory? In your response, be sure to define the..

  What is the value of net working capital

If total assets = $550, fixed assets = $375, current liabilities = $160, equity = $265, long-term debt = $125, and current assets is the only remaining item on

  How do we write off an account receivable as uncollectible

We report accounts receivable in the balance sheet at their net realizable value. Explain what this term means.

  What is the value today of stein''s debt and equity

What is the value today of Stein's debt and equity? What about that for Die's?

  How much amount will collect

A Port Glasgow student is celebrating today after winning a fantastic $2,543,000 Lotto jackpot in last Wednesday's draw - only a week after she dreamt.

  Responsibilities of the mortgage brokers to borrowers

Question 1: What were the responsibilities of the mortgage brokers to borrowers? To lenders? To investors? How well did they fulfill their responsibilities? Why?

  Examine the information requirements of the organisation or

you are required to produce a report on the subject of information systems is development and usage within national

  Importance of maximizing shareholders wealth

Discuss and explain the importance of maximizing shareholders wealth. Why does finance regard share value maximization as the primary corporate objective?

  Share of preferred stock is paying an annual dividend

A share of preferred stock is paying an annual dividend of $5. What is the price of the preferred stock if the required rate of return is 11%?

  Explain why the stock price of a firm

Explain why the stock price of a firm may rise when the firm announces that it is repurchasing its shares.

  Straight-line to zero

Guthrie Enterprises needs someone to supply it with 150,000 cartons of machine screws per year to support its manufacturing needs over the next five years

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd