4.

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of $6,750 and has an expected life of 3 years. Annual project after-tax cash flows begin 1 year after the initial investment and are subject to the following probability distributions: Project A Project B Probability Cash Flows Probability Cash Flows 0.2 $6,000 0.2 $ 0 0.6 6,750 0.6 6,750 0.2 7,500 0.2 17,000 BPC has decided to evaluate the riskier project at 12% and the less-risky project at 10%. a. What is each project's expected annual after-tax cash flow? Round your answers to the nearest cent. Project A: Project B: $ Project B's standard deviation (B) is $5,444 and its coefficient of variation (CV) is 0.73. What are the values of A and CVA? Do not round intermediate calculations. Round your answer for standard deviation to the nearest cent and for coefficient of variation to two decimal places. OA: S CVA