You have just performed a scenario analysis on a project wit
You have just performed a scenario analysis on a project, with the following results: Best Case: with a 30% probability, you get an NPV of $167 Base Case: with a 50% probability, you get an NPV of $71 Worst Case: with a 20% probability, you get an NPV of $34 What is this projects Expected NPV?
Solution
Answer:
Projects Expected NPV = (0.30 * $167) + (0.50 * $71) + (0.20 * $34)
Projects Expected NPV = $50.10 + $35.50 + $6.80
Projects Expected NPV = $92.40
