The expected NPV of a project is the arithmetic average of best case, most likely case, and worst case scenarios.

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The expected NPV of a project is calculated using probability-weighted scenarios, not the arithmetic average. The formula for expected NPV is (probability of best case scenario x best case NPV) + (probability of most likely scenario x most likely NPV) + (probability of worst case scenario x worst case NPV).

The Expected NPV of a Project Is the Arithmetic Average