Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows:

a. Find the expected value of the cash flow for each apartment complex.
b. What is the coefficient of variation for each apartment complex?
c. Which apartment complex has more risk?    

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Windy Acres Hillcrest Apartments Yearly aftertax cash inflow Probability Yearly aftertax cash inflow Probability .1 $10,000 $15,000 .2 .3 .4 .1 15,000 .2 25,000 30,000 .4 .2 .1 35,000 45,000 45,000 50,000