I´m completely lost with b i) part of question Q16 (page 125).
Please could you tell me how to get a 2.7 % probability of negative NPV from Z standard deviations of 1.9265?
and then they say:
at the 98% level ?= 1.645 (how to calculate it?)
Project VAR 1.645 X 1.02 X 3.162 =5.3 M (where do you get the 3.162 number from?)
and then they are writing that the above assumes 95% confidence level (no idea where they got 95%, if before they were mentioning 98%). They also say that at 99% confidence the project VAR would be 7.51 m. how is this calculated?
Many thanks for your help!
Please could you tell me how to get a 2.7 % probability of negative NPV from Z standard deviations of 1.9265?
and then they say:
at the 98% level ?= 1.645 (how to calculate it?)
Project VAR 1.645 X 1.02 X 3.162 =5.3 M (where do you get the 3.162 number from?)
and then they are writing that the above assumes 95% confidence level (no idea where they got 95%, if before they were mentioning 98%). They also say that at 99% confidence the project VAR would be 7.51 m. how is this calculated?
Many thanks for your help!
