Klott Company used scenario analysis and estimated its expected net present value (NPV) as $10,300 and expected standard deviation (σ) as $12,083. The coefficient of variation (CVNPV) of Klott's NPV is _____.
A) 0.25
B) 1.2
C) 5.6
D) 1.17
E) 0.45

Question

Quizplus · Accepted Answer

The coefficient of variation (CV) is calculated by dividing the standard deviation by the expected value. 
CVNPV = σ / expected NPV 
CVNPV = 12,083 / 10,300 = 1.17 
Therefore, the answer is D) 1.17.

Klott Company Used Scenario Analysis and Estimated Its Expected Net