Toys For You is considering a project for its capital budget. While the project's NPV is estimated at $750,000, this estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts that there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the below noted scenario analysis. What is the project's expected NPV under such scenario analysis. (answer positive number with no decimal and no comma nor dollar sign) Economic scenario Recession Below average Average Above average Boom Probability 0.05 0.15 0,50 0.25 0.05 NPV 350,000 -75,000 750,000 1,250,000 1,500,000

Toys For You is considering a project for its capital budget. While the project's NPV is estimated at $750,000, this estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts that there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the below noted scenario analysis. What is the project's expected NPV under such scenario analysis. (answer positive number with no decimal and no comma nor dollar sign) Economic scenario Recession Below average Average Above average Boom Probability 0.05 0.15 0,50 0.25 0.05 NPV 350,000 -75,000 750,000 1,250,000 1,500,000

Name: Vijay Toys For You is considering a project for its capital budget. Wh
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Description: Vijay Toys For You is considering a project for its capital budget. While the project's NPV is estimated at $750,000, this estimateassumes that the economy and market conditions will be average over the next few years. The company's CFO, however.fore

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 11P: Scenario Analysis Shao Industries is considering a proposed project for its capital budget. The...

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Scenario Analysis Shao Industries is considering a proposed project for its capital budget. The company estimates the projects NPV is 12 million. This estimate assumes that the economy and market conditions will be average over the next few years. The companys CFO, however, forecasts there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis: What are the projects expected NPV, standard deviation, and coefficient of variation?
Shao Industries is considering a proposed project for its capital budget. The company estimates the project! will be average over the next few years. The company's CFO, however, forecasts there is only a 50% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis: Economic Scenario Probability of Outcome Recession Below average 0.05 NPV -$58 million 0.20 -18 million Average Above average Boom 0.50 12 million 0.20 16 million 0.05 34 million What are the project's expected NPV, standard deviation, and coefficient of variation? Enter your answers for the NPV and standard deviation in millions. For example, an answer of $1.24 million should be entered as 1.24, not 1,240,000. Do not round intermediate calculations. Round your answers to two decimal places. E(NPV): $ ONPV: $ million million CVNPV:
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