What are the project expected npv and standard deviation

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The managers of Merton 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

.05 ($700,000)
.20 250,000
.50 120,000
.20 200,000
.05 300,000

a. What are the project's expected NPV and standard deviation of NPV?

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

 

Reference no: EM13292118

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