Tax considerations and will generate cash flows

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An investment costs $5,000 after tax considerations and will generate cash flows of $1,000 a year over its life. The capital investment will last for 8, 9, or 10 years, with probabilities of 0.4, 0.4, and 0.2 respectively.

At a 11% required return, compute (1) the expected NPV, (2) the variance of the expected NPV, and (3) the standard deviation of the expected NPV.

Reference no: EM131188032

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