Qualil evaluated a project using scenario analysis his, Ask an Expert

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Qualil evaluated a project using scenario analysis. His results indicate that the project normally will generate a net present value (NPV) equal to $19,800, which will occur 70 percent of the time.

But, he also discovered that 10 percent of the time the NPV will be -$20,100, and 20 percent of the time the NPV will be $31,500. The firm's policy is not to invest in projects that have coefficients of variation greater than 0.8.

Should Qualil recommend that the project be purchased?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93053734

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