Question

The managers of Hewlett Medical Clinic are analyzing a proposed project. The project's most likely NPV...

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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