Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes...

Economic Scenario	Probability of Outcome	NPV
Recession	0.05	($68 million)
Below average	0.20	(14 million)
Average	0.50	12 million
Above average	0.20	18 million
Boom	0.05	30 million

Calculate the project's expected NPV, standard deviation, and coefficient of variation. Round your answers to two decimal places. Enter your answers for the project's expected NPV and standard deviation in millions. For example, an answer of $13,000,000 should be entered as 13.

E(NPV)	=
σ_NPV	=
CV	=

Solutions

Expert Solution

jeff jeffy answered 8 months ago

Next > < Previous

Related Solutions

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However, the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 ($44 million) Below average 0.20 (12 million) Average 0.50 12 million Above average 0.20 20 million Boom 0.05 36 million Calculate the project's expected NPV, standard deviation, and coefficient...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 - $80 million Below average 0.20 - $26 million Average 0.50 12 million Above average 0.20 14 million Boom 0.05 30 million Calculate the project's expected NPV, standard deviation,...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 - $54 million Below average 0.20 - $14 million Average 0.50 12 million Above average 0.20 20 million Boom 0.05 28 million Calculate the project's expected NPV, standard deviation,...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes...

Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate assumes that economic conditions will be "average." However the CFO realizes that conditions could be better or worse, so she performed a scenario analysis and obtained these results: Economic Scenario Probability of Outcome NPV Recession 0.05 - $74 million Below average 0.20 - $28 million Average 0.50 12 million Above average 0.20 18 million Boom 0.05 26 million Calculate the project's expected NPV, standard deviation,...

5. Brandt Enterprises is considering a new project that has an estimated NPV of $800. The...

5. Brandt Enterprises is considering a new project that has an estimated NPV of $800. The assistant to CFO conducted a sensitivity analysis with regard to sales price and salvage value. The results are documented in the table below: Sales price change by -30% -15% 0 15% 30% NPV results 579.2 724 800 876 1051.2 Salvage value change by -30% -15% 0 15% 30% NPV results 624 780 800 820 984 The assistant needs to explain what sensitivity is and...

Beta Industries is considering a project with an initial cost of $6.9 million. The project will...

Beta Industries is considering a project with an initial cost of $6.9 million. The project will produce cash inflows of $1.52 million a year for seven years. The firm uses the subjective approach to assign discount rates to projects. For this project, the subjective adjustment is +2.2 percent. The firm has a pretax cost of debt of 9.1 percent and a cost of equity of 17.7 percent. The debt-equity ratio is .57 and the tax rate is 34 percent. What...

Alpha Industries is considering a project with an initial cost of $8.1 million. The project will...

Alpha Industries is considering a project with an initial cost of $8.1 million. The project will produce cash inflows of $1.46 million per year for 9 years. The project has the same risk as the firm. the firm has a pretax cost of debt of 5.64% and a cost of equity of 11.29%. The debt-equity ratio is .61 and the tax rate is 39 percent. A. Should the Firm accept the project? B.Calculate the Firms WACC

Alpha Industries is considering a project with an initial costof $8.2 million. The project will...

Alpha Industries is considering a project with an initial cost of $8.2 million. The project will produce cash inflows of $1.93 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.67% and a cost of equity of 11.31%. The debt-equity ratio is 0.62 and the tax rate is 21%. What is the net present value of the project?Wentworth's Five and Dime Store has a cost...

Alpha Industries is considering a project with an initial cost of $7.5 million. The project will...

Alpha Industries is considering a project with an initial cost of $7.5 million. The project will produce cash inflows of $1.55 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.46 percent and a cost of equity of 11.17 percent. The debt–equity ratio is .55 and the tax rate is 39 percent. What is the net present value of the project? $263,559 $482,364 $463,811 $397,552...

Alpha Industries is considering a project with an initial cost of $8.2 million. The project will...

Alpha Industries is considering a project with an initial cost of $8.2 million. The project will produce cash inflows of $1.93 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.67% and a cost of equity of 11.31%. The debt-equity ratio is 0.62 and the tax rate is 40%. What is the net present value of the project? Hint: You'll need to calculate the appropriate...

Subjects