P3 You are considering an investment project withtwo-year life. Due to theuncertainty in the market, three possible futureoutcomes at end of Years 1 & 2, and theirprobability of occurrence were determined in thetable below. Outcome 1 has an occurrenceprobability equivalent to 25% (P(0.25)), outcome 2with a probability of 45% (P(0.45)) andoutcome 3 with a probability of 30% (P(0.3)).End ofOutcome 1Outcome 2Outcome 3Expected valueP(F)-8,000VarianceyearP(0.25)P(0.45)P(0.3)-8,000-8,000-8,00013,0007,00015,00021,240,00026,00010,00013,0009,900a) Calculate the expected value at the end of year1 and using an interest rate of 10%, compute theexpected NPW value of the project.b) calculate the variance at year 0 and year 2c) compute the variance of the Net Present Valuedistribution and compute the standard deviation ofthe project NPW distribution.d) determine the probability for the investment tohave a positive NPW.d)

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You are considering an investment project with two-year life. Due to the uncertainty in the market, three possible future outcomes at end of Years 1 & 2, and their probability of occurrence were determined in the table below. Outcome 1 has an occurrence probability equivalent to 25% (P(0.25)), outcome 2 with a probability of 45% (P(0.45)) and outcome 3 with a probability of 30% (P(0.3)). End of Outcome 1 Outcome 2 Outcome 3 Expected value P(F) Variance P(0.25) -8,000 3,000 6,000 year P(0.45) P(0.3) -8,000 -8,000 -8,000 1 7,000 15,000 13,000 21,240,000 2 10,000 9,900 a) Calculate the expected value at the end of year 1 and using an interest rate of 10%, compute the expected NPW value of the project. b) calculate the variance at year 0 and year 2 c) compute the variance of the Net Present Value distribution and compute the standard deviation of the project NPW distribution. d) determine the probability for the investment to have a positive NPW. d)

You are considering an investment project with two-year life. Due to the uncertainty in the market, three possible future outcomes at end of Years 1 & 2, and their probability of occurrence were determined in the table below. Outcome 1 has an occurrence probability equivalent to 25% (P(0.25)), outcome 2 with a probability of 45% (P(0.45)) and outcome 3 with a probability of 30% (P(0.3)). End of Outcome 1 Outcome 2 Outcome 3 Expected value P(F) Variance P(0.25) -8,000 3,000 6,000 year P(0.45) P(0.3) -8,000 -8,000 -8,000 1 7,000 15,000 13,000 21,240,000 2 10,000 9,900 a) Calculate the expected value at the end of year 1 and using an interest rate of 10%, compute the expected NPW value of the project. b) calculate the variance at year 0 and year 2 c) compute the variance of the Net Present Value distribution and compute the standard deviation of the project NPW distribution. d) determine the probability for the investment to have a positive NPW. d)

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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