# NPV and Standard Deviation of a project

A 4-year project can be purchased for $10,000. Net cash benefits per year have an expected value of $4,000 and a standard deviation of $2,000. The required rate of return is 10%.

a) Expected NPV of the project.

b) Standard deviation of NPV assuming perfect correlation of cash flows.

c) Standard deviation of NPV assuming zero correlation of cash flows.

#### Solution Summary

The solution explains how to calculate the NPV and Standard Deviation of NPV a project