Assume that the capital cost and the present value of the cash flows generated by a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that the capital cost and the present value of the cash flows generated by a project are both uncertain. If the capital cost is normally distributed with mean $3,500 and a standard deviation of $175, and the present value of the cash flows generated by the project has a mean of $4,000 and a standard deviation of $100, determine the risk of the project. Assume that the capital cost and the present value of the cash flows generated by a project are both uncertain. If the capital cost is normally distributed with mean $3,500 and a standard deviation of $175, and the present value of the cash flows generated by the project has a mean of $4,000 and a standard deviation of $100, determine the risk of the project.
Expert Answer:
Answer rating: 100% (QA)
To determine the risk of the project we can calculate the coefficient of variation CV The coefficien... View the full answer
Related Book For
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale
Posted Date:
Students also viewed these finance questions
-
Selena put the following amounts of fruit into a blender to make a fruit smoothie. (1)/(2) cup of blueberries (2)/(3) cup of strawberries 1 cup of bananas What was the ratio of blueberries to...
-
Over the past few years, officials in Florida and other states that rely primarily on deep wells for drinking water have become aware of a potentially serious problem-the pollution of aquifers by the...
-
FREE-CASH-FLOWS-BASED VALUATION. In Problem, we projected financial statements for Wal-Mart Stores, Inc. (Walmart) for Years +1 through +5. The data in Exhibits 13 (see pages 985987) include the...
-
The labor force participation rate is increasing in Japan because... a) there are fewer unemployed people b) the working age population is increasing c) retirement ages are increasing d) more women...
-
What can you do to protect your privacy online? Draw up a concrete list of steps that you might reasonably consider. Are there some actions that you would not be willing to take, either because they...
-
An early science that tried to correlate personality with measurements of parts of a persons skull is known as ________. a. Phrenology b. Psychology c. Physiology d. Personality psychology
-
Washington Tennis & Education Foundation, Inc. (WTEF) is a nonprofit organization operating in the District of Columbia that provides athletic and academic programs for children from low-income...
-
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job 50 was the only job in process. The costs incurred prior to...
-
Engineers at electronic company use special wire to manufacture fuzzy logic circuit boards. The wire comes in 1,260 foot rolls that cost $2,700 each. Each board requires 4 1/5 feet of wire. How many...
-
Assuming a lower specification limit of 47 grams and an upper specification limit of 53 grams, what is the process capability of this process? How many defects would you expect in one million bags?...
-
How do applications for individual insurance policies compare to applications for group insurance policies?
-
Explain best practices of a reverse logistics operation. Classify the differences between forward and reverse logistics. Discuss the differences making reverse logistics different from forward...
-
the box 2kg is at rest on a rough s inclined plane (angle of 30*) not moving (g=10 m/s^2). what is s? how does the magnitude of the normal force compare to the weight (mg) of the object
-
Explain how ethical principles, e.g., beneficence, non-maleficence, autonomy, justice , might be relevant for the coalition to consider in addressing its mission on a micro and meso level for obesity...
-
Explain why it's important for owners of Canadian-Controlled Private Corporations (CCPC) to ensure that their businesses don't earn more than $500,000? Give two examples of what a small business...
-
Explain the impact cultural diversity has on the group process in counseling.
-
2. A wholesale coffee distributor sells raw coffee beans to the St. Johns Roasters. Since St. Johns Roasters buys a large quantity of raw beans, the wholesaler reduces their price by 2/11 on every...
-
(a) Find the equation of the tangent line to f(x) = x 3 at the point where x = 2. (b) Graph the tangent line and the function on the same axes. If the tangent line is used to estimate values of the...
-
A cosmetics company has identified a set of activities that must be performed to bring a new product to market. The activities, their precedence relations, and time estimates to complete each...
-
Road Rambler sells specialty running shoes and apparel through catalogs and the Web. Customers can phone in orders at any time day or night, seven days a week. During the 4 am to 8 am shift, a single...
-
Suppose the Xs in the following table indicate locations where fire sprinkler heads need to be installed in an existing building. The S indicates the location of the water source to supply these...
-
In a recent study of how mice negotiate turns, the mice ran around a circular 90 turn on a track with a radius of 0.15 m. The maximum speed measured for a mouse (mass = 18.5 g) running around this...
-
It is well known that runners run more slowly around a curved track than a straight one. One hypothesis to explain this is that the total force from the track on a runners feet the magnitude of the...
-
You are driving your car through a roundabout that has a radius of 9.0 m. Your physics textbook is lying on the seat next to you. What is the fastest speed at which you can go around the curve...
The Manufacture Dyeing Printing And Finishing Of Textiles 1st Edition - ISBN: 1021214434 - Free Book
Study smarter with the SolutionInn App