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After completing a scenario analysis for a prospective investment, the CFO of a company reported to the CEO that there is a 60 percent chance the investment will provide the firm with a net present value (NPV) equal to $128,300, there is a 25 percent chance the investment's NPV will be $185,400, and there is a 15 percent chance the NPV will be 2$77,600. The CEO will not purchase investments that have coefficients of variation greater than 0.70. Should the CEO purchase the investment?

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Basic Finance, Finance

Category:- Basic Finance
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