The managers of Hewlett Medical Clinic are analyzing a proposed project. The project's most likely NPV is $130,000, but as evidenced by the following NPV distribution, there is considerable risk involved:
Probability | NPV |
0.05 | ($800,000) |
0.20 | (250,000) |
0.50 | 130,000 |
0.20 | 200,000 |
0.05 | 400,000 |
What is the project's standard deviation of NPV?
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