Given the following, what is the project's standard deviation?The Carlisle Corporation is considering a proposed...
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Given the following, what is the project's standard deviation?The Carlisle Corporation is considering a proposed project for its capital budget. The company estimates that the project's NPV is $5 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 40% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis: NPV Economic Scenario Recession Below Average Average Above Average Boom Probability of Outcome 0.05 0.25 0.40 0.25 0.05 ($28 million (10 million) 5 million 8 million 15 million A $15.65 B$12.78 D$21.37 OA OB oc OD
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