Question: a: What is each project's expected annual cash flow? Round your answers to two decimal places. Project A :$ Project B: $ Project B '
a: What is each project's expected annual cash flow? Round your answers to two decimal places.
Project :$
Project B: $
Project s standard deviation is $ and its coefficient of variation is What are the values of and ound your answers to two decimal places.
$
b Based on the riskadjusted NPVs which project should BPC choose?
c If you knew that Project Bs cash flows were negatively correlated with the firm's other cash flow, but Project As cash flows were positively correlated, how might this affect the decision?
This would make Project B more appealing.
If Project Bs cash flows were negatively correlated with gross domestic product GDP while As cash flows were positively correlated, would that influence your risk assessment?
This would make Project B more appealing.
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