An enterprise is considering two projects, A and B with initial outlays of Tsh 500 million and Tsh 600 million. The inflows of the project are sensitive to the economic conditions that are expected to prevail over 10 years; the life of each of the projects. The cash flows for the 4 different economic conditions of excellent, Good, Average and Poor with their respective probabilities are as shown below. Assume cost of capital is 15%. Economic condition Probability Initial Cost Excellent Good Average Poor Certain 0.30 0.20 0.30 0.20 Cash Flows B A -500 150 120 100 80 -600 180 140 120 70 QUESTIONS: 1- What is the net present value of the projects under the different economic conditions? 2- What NPV do you expect for each of the project? 3- What are the risk associated with each of the projects in terms of standard deviation and coefficient of variation? 4- Which of the projects would you choose?