1. Consider the probability distributions of the first year cash flows of two projects, MNO and...
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1. Consider the probability distributions of the first year cash flows of two projects, MNO and PQR: MNO Possible cash flow -$10,000 $0 +$20,000 Probability 40% 45% 15% Possible cash flow -$10,000 $0 +$30,000 PQR Probability 10% 65% 25% (a) Calculate the range of possible cash flows for each project (b) Calculate the expected cash flow for each project (c) Calculate the standard deviation of the possible cash flows for each project (d) Calculate the coefficient of variation of the possible cash flows for each project (e) Which project has more risk? Why? 1. Consider the probability distributions of the first year cash flows of two projects, MNO and PQR: MNO Possible cash flow -$10,000 $0 +$20,000 Probability 40% 45% 15% Possible cash flow -$10,000 $0 +$30,000 PQR Probability 10% 65% 25% (a) Calculate the range of possible cash flows for each project (b) Calculate the expected cash flow for each project (c) Calculate the standard deviation of the possible cash flows for each project (d) Calculate the coefficient of variation of the possible cash flows for each project (e) Which project has more risk? Why?
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A RANGE OF POSSIBLE CASH FLOWS For project MNO the range of possible cash flows is 2000... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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