Brandt Enterprises is considering a new project that has a cost of $1,000,000, and the CFO set up the following table to show its three most likely…

1.Brandt Enterprises is considering a new project that has a cost of $1,000,000, and the CFO set up the following table to show its three most likely scenarios. 

WACC of the company = 11.5%

                                                        Cash Flows (Dollars in Thousands)                      NPV                     Prob. ×

                                          t = 0          t = 1          t = 2           t = 3                                                           NPV             

Prob. = 20%                                                           $800.0      $800.0      $800.0          $938.10 $187.62

Prob. = 60%                          -$1,000                               $520.0       $520.0      $520.0    $259.76 $155.86

Prob. = 20%                                       -$200.0     -$200.0     -$200.0        -$1,484.52                        -$296.90

                                                                       Exp. NPV = $ 46.57

                                                                                                Standard Deviation = 179.87