Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow...

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Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $160 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 0.2 0.2 0.3 0.3 Site A Site A Site B Cash Flows $70 160 170 210 Probability 0.1 0.2 0.2 0.4 0.1 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation Site B Cash Flows $ 50 80 160 210 230 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk. Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $160 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 0.2 0.2 0.3 0.3 Site A Site A Site B Cash Flows $70 160 170 210 Probability 0.1 0.2 0.2 0.4 0.1 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation Site B Cash Flows $ 50 80 160 210 230 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.

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To compute the coefficient of variation for each site we need to calculate both the mean expected va... View the full answer