15. The Cactus Corporation is considering a 2-year project, project A, involving an initial invest men t

Question:

15. The Cactus is considering a 2-year project, project A, involving an initial invest men t of $600 and the following (ash inflows and probabilities:

15. The Cactus Corporation is considering a 2-year project, project

a. Calculate the project's expected NPV and standard deviation, assuming the discount rate to be 8 percent.
b. The company is also considering another 2-year project; project B, which has an expected NPV of $30 and a standard deviation of $125. Projects A and B are mutually exclusive. Which of the two projects would you prefer? Explain.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...