Essay
Assume a project is expected to produce the following cash flows in each year, each cash flow is independent of one another, each cash flow is gamma distributed, the risk-free rate is 5 % , and the MARR =15% .
(a) Calculate the expected net present value
(b) Calculate the standard deviation of the net present value
(c) Determine the probability that the NPV will be less than 600 .
(d) Determine the probability that the NPV will lie between 800 and 1200 .
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