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b) Shao Industries is considering a proposed project for its capital budget. The company estimates...

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b) Shao Industries is considering a proposed project for its capital budget. The company estimates that the projects NPV Sh. 12 million. This estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO however forecasts that there is only a 50% chance that the economy will be average. Recognizing this uncertainty. she has also performed the following scenario analysis Economic Scenario Recession Below average Average Above average Boom Probability NPV 0.05 (70 million) 0.20 (25 million) 0.50 12 million 0.20 20 million 0.05 30 million Required Compute the following T I. II. III. Expected NPV, (5 Marks) Standard deviation (5 marks) Coefficient of variation (4 Marks)

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